The Hindu Business Line : Budget suggestions

All companies are not taxed equally and the tax treatment sometimes differs from State to State. The framers of the Constitution would have envisaged only individuals and joint families as being given exemption from income-tax on agricultural income.

They would not have conceived of large corporates deriving benefits and claiming exemption from tax.

The agricultural income of corporates should be deemed as business income as no director or shareholder is directly involved in the field operations of the company and a non-living person — a company — cannot carry out agricultural operations that can be deemed as human labour and skill.

A central agricultural income tax Act can be brought into force as was done in the case of sales tax.

The States that levy agricultural income tax should repeal their respective Acts and be suitably compensated as is being done under the value added tax (VAT) regime.

A second suggestion: Road tax on heavy vehicles should be collected by the Centre. The country's national highways are maintained by the Centre and vehicles carrying goods ply mainly on such roads.

Thus, allowing States to collect road tax when the Centre maintains the roads appears illogical.

S. Venkatasubbu

Coimbatore

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