Ahmad Raza

and Non-Agricultural Incomes A Suggestion THE disparate treatment of agricultural and non-agricultural income for the purpose of income-tax creates ,a strong temptation for the assessees to masquerade their income earned otherwise as gains from agriculture so as to avoid tax liability. It is in realisation of this that the Raj Committee on Taxation of Agricultural Wealth and Income recommended the scheme of partial integration of agricultural and non-agricultural income for determining the rate of tax applicable to non-agricultural income. The scheme has since been accepted by the government. Under the scheme, both the agricultural and the non-agricultural components of income are aggregated and the tax on the non-agricultural component is levied as if it were placed in the top slab of the aggregate income. The scheme is justified on the ground that it will (i) ensure that the tax burden on assessees with similar income does not differ sharply merely because of the fact that part of it is derived from agriculture; and (ii) curb the temptation to dress up a large chunk of taxable income as income of agricultural origin.