WORLD HISTORY

Detailed explanation-1: -The state governments are vested with the power to tax agricultural income, land and buildings, sale of goods (other than inter-state), and excise on alcohol. Local authorities such as Panchayat and Municipality also have power to levy some minor taxes.

Detailed explanation-2: -By default, agricultural income is exempted from taxation and not included under total income. The Central Government can’t impose or levy tax on agricultural income. The exemption clause is mentioned under Section 10 (1) of the Income Tax Act of India.

Detailed explanation-3: -Agriculture is the most significant source of income for the central and state governments. The government of the country has substantial revenue from rising land revenue. Also, the movement of agricultural goods helps generate revenue for the Indian railways, which helps the government in revenue generation.

Detailed explanation-4: -The policy of commercialization of agriculture by the British encouraged market oriented production of cash crops such as opium, tea, coffee, sugar, jute and indigo. Indian peasants were forced to grow these cash crops that spoiled the fertility of the land and no other crop could be grown on it.