The primary occupation in India is agriculture. The government comes up with several schemes and facilities to encourage the occupation. One such scheme offered is the tax exemption given to income received from agriculture under the Income Tax Act, 1961. However, the facility is said to be misused during the demonetisation period.
While investigating the tax evasion cases of demonetisation, the income tax department is trying to get deeper into the gains made from agriculture income by farmers and other assesses.
The officers suspect that black money/non-agriculture income has been declared as agriculture income during the demonetisation period.
The speculation was made based on cases, where cash receipts shown as agriculture income in their account books were found in the scanner.
Farmers have declared enormous income for selling non-perishable crops, such as turmeric, which is suspicious.
Also Read: Budget 2019: Income tax exemption limit likely to be increased to Rs 5 lakhs
In such cases, IT officers are assigned to validate the farm’s ownership records and retrieve the information about agriculture operations.
Sales of the crops made to marketing societies in a large chunk will also be considered for investigation. The money transfers declared for the purchase of seeds, fertilisers, and pesticides will be supervised too.
Furthermore, IT officers are instructed to look out for the suspicious transactions of companies. It can be validated based on the cash balance declared on April 1, 2016, as compared to that on November 8, 2016, the day demonetisation was announced. Checking the licences for running these companies is also under consideration.
Many more suspicious transactions will be scrutinised carefully to identify the gaps such as advance received, advance returned, and gold purchases.
