Tax farm income above Rs 50L: Panel

NEW DELHI: An expert committee has suggested taxing agricultural income beyond Rs 50 lakh, besides restarting the controversial fringe benefit tax (FBT) on perks and a levy on cash withdrawals beyond a specified limit to widen the tax base, moves which are expected to attract a fresh round of criticism over the government's policies. Stock Market Trading Tips

The third report by the panel, headed by Parthasarathi Shome, a tax expert and an advisor to former finance minister P Chidambaram, comes with the recommendation to increase the wealth tax base by including financial assets along with a higher threshold but a lower levy. It also includes other recommendations such as keeping tabs on real estate and retail sectors as well ashigh networth individuals (HNIs). 

It has suggested that all exemptions, including those related to income tax, be reviewed and the ambit of service tax be widened. The committee has highlighted the revenue lost due to excise exemptions and giveaways, including those for area-based exemptions.
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A tax on agricultural income is a near uncertainty, given the political landscape and an amendment that involves states. Similarly, the reintroduction of FBT and bank cash transaction tax - which was introduced by Chidambaram on Shome's advice only to be withdrawn later - are unlikely to find favour with the BJP government. Finance minister ArunJaitely has repeatedly stated the government's stance of lower tax rates to help boost consumption and savings in the economy. But the committee's recommendation for avoiding a fresh tax amnesty is certainly something that the government will go along with given its strong position on targeting tax evaders and those stashing black money. 

There is a special set of recommendations for the cash economy, which it says is a major problem in land dealings and construction sector and suggested a better assessment of the underground economy. It has suggested other measures such as encouraging small traders to use debit cards more extensively, which will leave an audit trail of transactions undertaken by them, which could be leveraged for widening the taxpayer base. Nifty Trading tips