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31 May 2019
Agricultural Income During Demonetization Under IT Scanner
- Cash deposit during demonetization is under deep scrutiny. Even though Income Tax (IT) Act of 1961 makes agriculture income exempt from taxes, still the possibility of utilization of law is apprehended. Income Tax Department officers suspect that excess non-agriculture income or black money was declared as agriculture income.
- Under the revised Standard Operating Procedures (SOPs) formulated by the Central Board of Direct Taxes (CBDT), cash receipts shown as agricultural income in the book of accounts are under the scanner. During demonetization, farmers have declared large cash gains after selling non-perishable crops such as turmeric.
- In suspicious cases, the IT officers have been asked to scrutinize farm land records for ownership and seek details on agriculture operations. Sales made by the farmers to marketing societies in large quantum is also being looked into.
- IT officers have also been asked to look at suspicious transactions of companies and compare cash balance as on April 1, 2016 with cash balance as on November 8, 2016 (the day demonetization was announced). The licenses and permissions for running the companies are also being inspected where ever required.