Indian tax probe targets bogus farm-income claims with no land behind them
Indian tax authorities have uncovered hundreds of cases where agricultural-income exemptions were claimed without any land being declared. The probe covered claims ranging from 5 million rupees to 4 billion rupees and points to large-scale misuse of the farm-income tax regime.
India’s Central Board of Direct Taxes has identified a wave of suspicious agricultural-income claims in which taxpayers sought exemptions while declaring no land holdings at all. According to The Economic Times, the review found more than 300 such cases, and in 310 of them the total amount of exemptions claimed reached 20.38 billion rupees, exposing a potentially significant hole in tax collection.
The scale of the claims was striking. Authorities found supposed farm income ranging from 5 million rupees to as much as 4 billion rupees even though the land area declared by the claimants was listed as zero. For tax officials, that raised an immediate red flag that the agricultural-income exemption was being used well beyond any genuine farming context.
The investigation described several methods allegedly used to create non-genuine farm income. In some cases, capital gains from land sales were reportedly passed off as agricultural income to avoid tax. In others, undeclared income or receipts from allied or unrelated activities were classified as farm income, both to escape taxation and to legitimise unaccounted money through a category that enjoys special treatment.
The review was carried out under the department’s SAKSHAM initiative, which relies on advanced data analytics to detect anomalies in tax filings. Officials examined returns with unusually high farm-income claims, cross-checked them against multiple datasets and, in some cases, used satellite imagery and mapping tools to verify whether agricultural activity was actually taking place on the land for which exemptions were claimed. The analysis covered returns from assessment years 2021-22 through 2023-24.
Tax authorities are now urging taxpayers to revise or update their returns and pay taxes wherever necessary. At the same time, officials stressed that there is no move to withdraw exemptions available to genuine farmers or small cultivators. The campaign, they said, is aimed specifically at stopping large-scale abuse of agricultural-income provisions by high-value taxpayers using farm status as a tax shelter.