BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Scattered nature of land holdings
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Seasonality of production
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The fact that agriculture is not taxed any where in the world
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Increasing overhead cost of tax collection and the lack of political will
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Detailed explanation-1: -Agriculture is an informal sector. Almost all the payments are made in cash which makes it difficult to keep a track of income and expenditure. Assessing their true income or income earning potential becomes a burdensome task and if proper revenue is not known, ascertaining the tax amount will get problematic.
Detailed explanation-2: -Agricultural income is not taxable under Section 10 (1) of the Income Tax Act since it is not included in a person’s total income. However, if agricultural revenue surpasses Rs. 5, 000 per year, the state government may levy a tax on it.
Detailed explanation-3: -As per section 10(1), agricultural income earned by the taxpayer in India is exempt from tax. Agricultural income is defined under section 2(1A) of the Income-tax Act.