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Report No. 49

17. Power to take into account other income included in power to tax.-

In our view, the power of the Union to tax non-agricultural income includes the power to take into account agricultural income for the purpose of determining the rate of tax, if it is found to be necessary for the efficient exercise of that power. It has been stated that1 to the extent the present exclusion of the agricultural income has acted as a loophole in the existing central income-tax, it has provided an avenue for unaccounted money with its undesirable economic effects on the economy. It has further been stated that2 "there is scope for unaccounted money masquerading as agricultural income". The proposal could, to a certain extent, reduce the effect of unaccounted money derived from non-agricultural income masquerading as agricultural income.

1. V.P. Gandhi Some Aspects of India's Tax Structure, (1970), p. 172.

2. S. 13hoothalingam Final Report on Rationalisation and simplification of the tax structure, (1968), (Ministry of Finance), p. 48.

The Proposal for inclusion of Agricultural Income in the Total Income for the purpose of determining the Rat of Tax under the Income-Tax Act, 1961 Back

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