Quick Summary
In a major tax crackdown, the Income Tax (I-T) Department has uncovered discrepancies in agricultural income declarations using satellite imagery. A farmer claiming ₹7 lakh per acre in farm income and ₹1 lakh per acre in rental earnings for land around Hyderabad has come under scrutiny, as the figures don't align with actual cultivation records. Tax Exemption Loophole Under Investigation Agricultural income is exempt from income tax, making it an attractive loophole for converting undisclose
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FAQ :
The IT Department is using satellite imagery to verify actual cultivation on land declared as agricultural, identifying cases where land has been converted for real estate or was never cultivated, despite claims of farm income.
Agricultural income is exempt from income tax, making it a loophole for individuals to declare undisclosed wealth as legal income. The department is targeting unusually high declarations to prevent tax evasion.
The IT investigation unit in Hyderabad has issued notices to nearly 50 individuals who declared agricultural income exceeding ₹50 lakh per annum or ₹5 lakh per acre, flagging them for potential tax fraud.
Discrepancies include farmland never being cultivated, agricultural land being converted for real estate ventures, and taxpayers wrongly claiming tax exemptions on land sales that should be business income.
Landowners failing to provide proof of genuine farming activity may face penalties, tax reassessments, and legal consequences.
Income from genuine farming and leasing rural farmland is tax-free. However, selling urban agricultural land or repurposing farmland for other uses is taxable.
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