The Punjab Agricultural Income Tax Rules 2001

The Punjab Agricultural Income Tax Rules, 2001 

These Punjab Agricultural Income Tax Rules, 2001 explains the procedure of exemption, forms used, Method of accounting, Payment of tax with return of total agricultural income, Return of total agricultural income, Notice for furnishing return of total agricultural income, Revised return of total agricultural income, Self-assessment, Assessment on the basis of return, Notice for production of books of account, Assessment on production of accounts, evidence, Best Judgment assessment, Limitation for assessment, Additional assessment, Payment of tax on demand, Collection of tax as arrears of land revenue, Suspension and remission of tax, Refund of tax, Maintenance of Accounts etc.

Method of Accounting under The Punjab Agricultural Income Tax Rules 2001

Agricultural income shall be computed for the purposes of the Act in accordance with the method of accounting regularly employed by the assessee.

• Notwithstanding anything contained in sub-rule (1), Government may
  • require, by a general or special order published in the official Gazette, that the accounts shall be maintained in such form and in such manner as may be prescribed; and
  • prescribe the manner in which payment of commercial nature shall be made or commercial transactions recorded and thereupon the agricultural income of the assessee shall be computed on the basis of the accounts or records maintained or payments made accordingly.

Where no method of accounting has been regularly employed, or if the method employed is such that in the opinion of the Collector, the agricultural income cannot be properly deducted therefrom or where in any case to which sub-rule (2) applies, the assessee fails to maintain accounts, make payments or record transactions in the form or manner, as the case may be, prescribed under the said sub-rule, the agricultural income of the assessee shall be computed on such basis and in such manner as the Collector thinks fit.

Payment of tax with return of total agricultural income

Every person who is required under the Act to furnish a return of total agricultural income and who is liable to pay tax in respect of the agricultural income of the income year, instead of land based tax under the Act, shall pay, by means of a challan, into the relevant head of account of the Government, on or before the date on which he is so required to furnish such return, the amount of the tax due from him, after adjusting the amount of tax already paid by him in respect of the same income year under the Punjab Agricultural Income Tax Rules 1997.

Return of total agricultural income

Every person who is required under the Act to furnish a return of total agricultural income for any income year shall furnish such return in Form ‘A’ on or before the thirtieth day of September next following the income year;

Provided that the Collector who has to assess and collect the tax under these rules may on sufficient cause being shown, extend the date for the delivery of the return so however that no extension of time for a period or periods amounting in all to thirty days shall be allowed.

In case total agricultural income of an assessee in respect of the income year pertains to one Sub-Division only in the Punjab, return under sub-rule (1) shall be furnished to the Collector of that ⁴ [Sub-Division]. In case the total agricultural income of an assessee in respect of the income year pertains to more than one ⁵[Sub-Division] in the Punjab, he shall indicate in his return under sub-rule(1) his choice regarding Collector of the Sub-Division, within whose jurisdiction a part of cultivated land of the assessee during the income year was situated
and who shall assess and collect the tax and the return shall be furnished to the Collector of that Sub-Division:

Provided that such choice shall not be different from the one given by the assessee in respect of the same income year under the Punjab Agricultural Income Tax Rules 1997:

Provided further that where no such choice is given by the assessee, the tax shall be assessed and collected by the Collector of that ⁸[ Sub-Division] within whose Jurisdiction the assessee held during the relevant income year major portion of the cultivated land.

The assessee shall deliver personally or through an authorized agent, the return under sub-rule (1) in the office of the Collector of the ⁹[ Sub-Division] who has to assess and collect the tax under these rules. The office of the Collector of the ¹⁰[ Sub-Division] at which the return is so delivered shall issue acknowledgement receipt in Form ‘B’.

The assessee shall also send by post a copy of the return to every other Collector of the ¹¹[ Sub-Division] within whose jurisdiction the assessee held during the relevant income year part of the cultivated land.

The return in Form ‘A’ shall, on the date of receipt in the office of Collector of the  Sub-Division be entered in register in Form ‘C’.

Notice for furnishing return of total agricultural income

The Collector of the Sub-Division concerned may at any time, by notice in writing, require any owner who in his opinion is chargeable to tax or is required to file return of total agricultural income under rule 5 for any income year, to furnish a return of total agricultural income for such year within thirty days from the date of service of such notice or such longer or shorter period as may be specified in the notice or as the Collector of the Sub-Division l concerned may allow:

Provided that no such notice shall be issued after the expiration of two years from the end of the assessment year in which the total agricultural income was first assessable.

Revised return of total agricultural income

If any person has not furnished a return of total agricultural income as required under the Act and these rules (hereinafter in this rule referred to as ‘return’), or having furnished a return, discovers any omission or wrong statement therein, he may, without prejudice to any liability incurred by him under any provision of the Act, furnish a return or revised return, as the case may be, at any time before the assessment is made.

Self-assessment of agricultural income

Where the return of total agricultural income for any income year furnished by the assessee under rule 5 qualifies for acceptance in accordance with the provisions of a scheme of self-assessment made by the Board of Revenue, with the approval of
Government, for that year, or under any instructions or orders issued thereunder, the Collector of the Sub-Division shall assess by an order in writing the total agricultural income of the assessee on the basis of such return and determine the tax payable on the basis of such assessment.

Explanation.- For the removal of doubt it is hereby declared that a return of total agricultural income furnished under rule 5 does not include a return of total agricultural income furnished under rule 7.

Notwithstanding anything contained in sub-rule (1), the Board of Revenue or the Collector if he is so authorized by the Board of Revenue in this behalf, may in accordance with a scheme referred to in sub-rule (1) select out of the returns referred to in that sub-rule the cases or classes of cases or assessees or classes of assessees howsoever determined, for assessment under rule 11 and the Collector of the ¹⁶[ Sub-Division] shall proceed to make the assessment under that rule or if the circumstances so warrant, under rule 12 accordingly.

Assessment of agricultural income on the basis of return If the Collector of the Sub-Division is satisfied without requiring the presence of the assessee or the production by him of any evidence that a return furnished under rule 5 is correct and complete he shall by an order in writing assess the total agricultural income of the assessee and determine the tax payable on the basis of such return.

Notice for production of books of account for agricultural income

The Collector of the Sub-Division may serve upon any assessee who has furnished a return of total agricultural income for any income year or upon whom a notice has been served to furnish such return, a notice requiring him, on a date specified therein to attend the Collector’s office or to produce or cause to be produced any evidence on which such assessee may rely in support of the return if furnished and such accounts documents or evidence (including accounts or documents relating to any period prior or subsequent to the said income year) as the Collector of the Sub-Division may require:

Provided that the Collector of the Sub-Division shall not require the production of any document relating to a period more than two years prior to the income year.

Assessment on production of accounts, evidence, etc.- The Collector of the Sub Division after considering the evidence on record (including evidence if any produced under rule 10) and such other evidence as the Collector of the Sub-Division may require on specific points, shall by an order in writing assess the total agricultural income of the assessee and determine the tax payable by him on the basis of such assessment:

Provided that where the assessee produces books of accounts as evidence in support of the return the Collector of the Sub-Division shall before disagreeing to such accounts, give a notice to the assessee of defects in the accounts and provide an opportunity to the assessee to explain his point of view about such defects and record such explanation and the basis of computation of total agricultural income of the assessee in the assessment order.

Best judgment assessment in Agricultural Income

Where any assessee fails to furnish a return of total agricultural income required to be furnished by him under rule 5 or fails to comply with any of the terms of notice issued under rule 10 the Collector of the Sub-Division may, by an order in writing assess the total agricultural income of the assessee, to the best of his judgment and determine the amount of tax payable by him.

Agricultural Income and its Taxation in Punjab

The Agricultural Income is Exempt from tax under Income Tax Ordinance, 2001 and in Income Tax Ordinance, 2001 Agriculture Income is defined and explained under section 41.

In order to claim exemption of Agricultural Income as per provisions of 41 and section 111(1)(d) of the Income Tax Ordinance, 2001.

Therefore, provincial law on agriculture income have fundamental importance to conclude on whether such income is exempt from tax or not, while computing individual income tax liability under the provisions of Income Tax Ordinance, 2001.

Limitation for assessment in Agricultural Income

No assessment under rules 9, 11 or 12 shall be made after the expiration of two years from the end of the assessment year in which the total agricultural income was first assessable,

Notwithstanding anything contained in sub-rule (1) where a return of total agricultural income has been filed after the end of the financial year in which the last date of filing of such return specified in rule 5 falls, no assessment under rules 9, 11 or 12 shall be made after the expiration of two years from the end of financial year in which the said return is filed.

Notwithstanding anything contained in sub-rule (1) where for any income year, an  assessee has failed to furnish return of total agricultural income no assessment under rules 11 or 12 shall be made after the expiration of two years from the end of the financial year in which the notice under rule 6 was served.

Additional assessment of Agricultural Income

If in any year, for any reason,-

(a)                   any agricultural income chargeable to tax under the Act has escaped assessment; or

(b)       the total agricultural income of an assessee has been under assessed or assessed at too low a rate or has been the subject of excessive relief or refund under the Act or these rules, the Collector of the Sub-Division may at any time subject to the provisions of sub-rules (2) and (3) issue a notice to the assessee containing all or any of the requirements of a notice under rule 6 and may proceed to assess or determine by an order in writing, the total agricultural income of an assessee or the tax payable by him as the case may be and all the provisions of the Act and these rules shall, so far as may be, apply accordingly:

Provided that the tax shall be charged at the rate applicable to the assessment year for which the assessment is made.

No proceedings under sub-rule (1) shall be initiated unless reliable information has come into the knowledge of the Collector of the Sub-Division.

No order under sub-rule (1) shall be made after the expiration of two years from the end of the assessment year in which the total agricultural income was first assessable.

Payment of tax on demand for The Punjab Agricultural Income Tax Rules 2001

Where any tax is payable in consequence of any assessment or an order made under these rules, the Collector of the Sub-Division shall serve upon the assessee or any other person liable to pay such tax on behalf of the assessee, a notice of demand (assessment) in Form ‘D’ and if warranted notice of demand (penalty) in Form ‘D-l’ specifying the sum payable and thereupon the sum so specified shall be paid to the credit of Government within the time mentioned in the said notice.

Collection of tax as arrears of land revenue

The amount of tax and penalty which is not paid within the due date specified in the demand notice under rule 15 shall be recoverable as arrears of land revenue.

Suspension and remission of agricultural tax

Government may in areas declared calamity affected, exempt or remit the whole tax or part thereof in respect of an assessment year where corresponding suspension or remission of other Government taxes in respect of agricultural land has been given.

Refund of tax on Agricultural Income

Where any assessee satisfies the Collector of the Sub-Division that the amount of tax paid by him under the Act and these rules for any income year exceeds the amount with which he was properly chargeable under the Act and these rules for that income year, he shall be entitled to refund of the amount so paid in excess.

An application for refund of tax shall be made by the assessee in form ‘E’ within two years of the end of the assessment year to which it relates.

Where an application for refund is made under sub-rule (2) the Collector of the Sub-Division shall determine by an order in writing the amount of refund on being satisfied that such amount is due to the applicant and where he is not so satisfied he may by an order in writing reject the application.

The Collector of the Sub-Division may before making an order under sub-rule (3) call for such particulars, documents and evidence as he may require.

Where as a result of an order passed in appeal, review or revision under the Act, refund of any amount becomes due to the assessee the Collector of the Sub-Division shall refund the amount to the assessee irrespective of whether he has or has not made any claim in that behalf.

Where refund of any amount becomes due to an assessee the Collector of the Sub Division shall order refund in accordance with the provisions of the Treasury Rules (Punjab) and the same shall be paid through voucher on Form S.T.R. 34.

Maintenance of Accounts for Agricultural Income

The accounts of demand and recovery of tax under these rules shall be maintained by the Collector of the Sub-Division in register in Form ‘F’. A separate register in Form ‘F’ shall be maintained for each Tehsil for The Punjab Agricultural Income Tax Rules 2001.

Where as a result of decision of appeal or review or revision, the initial assessment of tax by the Collector of the Sub-Division is altered, the alteration should be incorporated in register in Form ‘F’ and copies of the relevant decision should be placed on the file of the assessee.

Agricultural Income and its Taxation in Punjab

The Agricultural Income is Exempt from tax under Income Tax Ordinance, 2001 and in Income Tax Ordinance, 2001 Agriculture Income is defined and explained under section 41.

In order to claim exemption of Agricultural Income as per provisions of 41 and section 111(1)(d) of the Income Tax Ordinance, 2001 read with The Punjab Agricultural Income Tax Rules 2001.

Therefore, provincial law on agriculture income have fundamental importance to conclude on whether such income is exempt from tax or not, while computing individual income tax liability under the provisions of Income Tax Ordinance, 2001.

Read more blogs here and to contact FBR click here.

To read more on Agricultural Income and Taxation click here (Agricultural Income and its Taxation in Punjab).