The Centre will not impose tax on agricultural income, Finance Minister Arun Jaitley has said.

Jaitley’s response in the Lok Sabha on Friday puts to rest questions on whether the Government will endorse the Parthasarathi Shome-led Tax Administration Reform Commission (TARC) recommendation for taxing of large farmers with income above ₹50 lakh a year. The report was submitted on December 3.

The measure, in conjunction with the re-introduction of fringe benefits tax and banking cash transaction tax, was suggested in order to widen the tax base. Shome had noted the move could block an escape route for black money but that such a move would need political consensus across party lines. That, in addition to a strong farm lobby, makes it unlikely for the recommendation to be considered in the 2015-16 Budget.

Jaitley was responding to a question on whether the Government proposes to impose tax on agricultural incomes as most claimants were rich farmers and companies.

The Finance Minister stated that the total amount of agricultural income declared by taxpayers in returns filed up to November 28 for exemption in the 2014-15 assessment year stood at ₹9,338 crore.

Jaitley said that while the Constitution allows States to tax agriculture, the Centre does not levy any tax on farm income.

The Minister also said the number of taxpayers claiming exemption for agri-income was 402,736 as of November 28. He added there was no data pertaining to claimants from the poor and marginal farmers’ sections available with the Income Tax Department.

A list of the top 10 claimants for agriculture tax exemption in 2014-15 was also provided to the Lower House. Kaveri Seed Company topped the list, seeking exemption of ₹186.63 crore, followed by hybrid seed giant Monsanto India (₹94.40 crore) and tea company McLeod Russel India (₹73.10 crore).

Monsanto India’s stocks surged nearly 7 per cent on the BSE to end at ₹3,183.50, up ₹193.50 from the previous close of ₹2,990.