IT new rules: On one hand, most people are confused about whether tax is levied on agricultural income or not, on the other hand, they look for ways to save tax in the name of agricultural income. Let us tell you that there is a provision of tax on the purchase and sale of urban agricultural land, but agricultural income is tax-free.

This is the reason why many people show their income as agricultural income to save tax. According to the rules of income tax, doing so is not right. Now the department will take the help of satellites to catch these cases and identify such taxpayers (Taxpayers News). Action will also be taken if fraud is found.

The case came to light in this city-

Recently, a different case of saving income tax (tax exemption) has come to the notice of the department in Hyderabad. When a farmer from Hyderabad adopted a similar method to get an exemption in income tax, he came under the grip of the department. The farmer claimed an income of Rs 7 lakh per acre from agricultural land in and around Hyderabad.

Along with this, the farmer also claimed a rental income of Rs 1 lakh per acre. The farmer made this claim but when the income tax department investigated through satellite imagery technology, the figure was different. This brought the matter to light, now the department is preparing to catch such people who often try to save tax (tax exemption rules) from agricultural income.

The department sent a notice and sought a response-
After this case, the Income Tax Department is now investigating in other states as well. In some states, such cases have been caught, in which many people have shown income up to Rs 50 lakh as agricultural income despite not having land (tax on agricultural land).

Many have shown income of more than Rs 50 lakh as agricultural income and do not have land accordingly. About 50 people have been identified by the Income Tax Department and have been asked to respond by sending notices. These include many people who have shown an annual income of Rs 50 lakh or Rs 5 lakh per acre or more as income from farming.

This is how fraud is caught-

Now the income tax return is being re-examined by the department. This investigation is going on in Telangana and Madhya Pradesh. When the Income Tax Department investigated through satellite imagery technology, a surprising thing came to light in some places farming had not been done for the last few years, and the income from there was being claimed to save tax.

Most of these lands have been converted into real estate. The Income Tax Department is also keeping an eye on fake earnings cases of Rs 5 lakh per acre. These figures of farming income are mismatched with the government figures. It is estimated that if the department (IT department) investigates this matter thoroughly, then many big personalities can get trapped.

The tax exemption was claimed fraudulently-

In one case, the department also found that the taxpayer (taxpayers news) had sold agricultural land by dividing it into small plots. In this transaction, tax exemption was claimed in the name of farming income. This income has been considered as business income (tax on business income), but the farmer had shown it as farming income. According to the department, exemption on capital gains can be availed only when the land is used for farming. The tax has to be paid on land with immovable property.

This is not included in farming income-
Income from farming done in rural areas land is included in farming income. Plotting and selling land is not included in farming income. Income from selling urban farming land, commercial use, renting out farmhouses, poultry farming is also not income from farming. Income from these is taxable as per the income tax slabs.

Disclaimer: This content has been sourced and edited from Hr Breaking. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.