Early this month, 10 acres of agricultural land on the outskirts of Jalandhar belonging to municipal councillor Gurdip Singh Nagra was attached for failure to pay a wealth tax of Rs. 25,66,333, accumulated since 1999-2000. His brother, Rajinder Singh Nagra, has been given similar notice in respect of his 15 acres.
The Income Tax Department action comes after the Supreme Court rejected the brothers’ plea against payment of the tax. The Nagra case and the possibility of similar action against hundreds of farmers across Punjab have been seized by the Shiromani Akali Dal–BJP government to up the ante against levy of wealth tax on agricultural land.
Not only has the Parkash Singh Badal government called a special Assembly session to pass a unanimous resolution on the issue but Mr. Badal has shot off letters to all Chief Ministers and is meeting leaders of various political parties on Tuesday to “alert them to the catastrophic consequences if the proposed amendments to the Finance Bill 2013” are passed — of the tax noose further tightening on farmers having land close to municipal limits.
Meanwhile, Bhupinder Singh Hooda, Chief Minister of Haryana, another agricultural State, led a delegation of 30 Congress leaders from Punjab, Haryana, Rajasthan, Delhi and Orissa to Union Finance Minister P. Chidambaram, who has assured the team that no wealth tax would be imposed on agricultural land in the country. According to a statement released here on Monday, Mr Hooda said, “The Finance Minister has assured [us] that he will make a statement on the floor of the House while replying to the Finance Bill and no wealth tax will be imposed on agricultural land, whether within or outside the municipal limit.”
However, besides the Nagras, a dozen odd farmers of Jalandhar have received similar notices for recovery of wealth tax as their fields fall within an eight km-radius of the municipality, categorising their holdings as urban land since 1992. The Nagras were able to bring their case to the notice of the government because three members of the family are active Akali Dal workers.
Besides opposing full implementation of the present law that decrees annual wealth tax at one per cent of collector rate per acre for agricultural land within an eight-km radius of a municipality, notified area committee or cantonment board, the SAD MP from Bhatinda, Harsimrat Badal, will move a proposal to annul the proposed amendment in the Finance Bill — due to come up in Parliament this session.
According to the amendment, ‘urban area’ liable to attract wealth tax includes land within a two-km radius of a municipality that has a population of up to one lakh, within a six-km radius with up to a 10-lakh population and an eight-km radius with a population above 10 lakh. This, say officials, will put more burden on small farmers and jeopardize social order in the countryside.
The problem in Punjab and other States with high levels of urbanisation is that areas of many municipalities almost overlap each other, leaving farmers in their vicinity vulnerable to the hefty tax. In Jalandhar, for instance, where the collector rate of land is between Rs. 20 lakh and Rs. 35 lakh an acre, farmers are earning an annual lease of around Rs. 30,000 per acre. If implemented in earnest, this will mean their paying Rs. 20,000-Rs. 30,000 annually on their land. “It will force the small and marginal farmers to sell their land to land sharks at throwaway prices,” say the sources.
Sensing the political impact of the issue, with the Lok Sabha elections round the corner, Mr. Badal has appealed to the Congress to shun politics and attend the Assembly session “as there should be a unanimous stand.” The former Chief Minister, Amarinder Singh, however, says Mr Badal is simply playing politics on this matter. For, holding a session on an issue which is not within the Assembly’s jurisdiction “will amount to either making a fool of yourself or the poor farmers whose cause you claim to protect”.
But sources in the Punjab government say that until there is a categorical assurance from the Finance Minister himself or the Prime Minister, the programme to raise the pitch at the national level will continue.
