Poultry Farmers Seek ‘Agriculture’ Status under Income Tax Act

The Karnataka Poultry Farmers & Breeders Association (KPFBA)  has urged the Government to consider all poultry farming activities as ‘Agriculture’ under the Income Tax Act. The poultry sector is exposed to all types of natural vagaries like agricultural crops and is rural-based, giving employment mostly to unskilled and rural population hence it should be brought under ‘Agriculture’ in the Income Tax Act such that poultry farmers can avail tax benefits.

Karnataka Poultry Farmers & Breeders Association (KPFBA) is an Apex body that represents Poultry Farmers & Breeders of Karnataka. It was established in 1991 to promote the development of poultry breeding & farming in the state, where the occupation is a major activity. The association is registered under the Karnataka Societies Act 196, u/s 12 A (a) 80G of the Income-tax Act 1961. KPFBA aims at providing facilities for exchange of information and opinion of interest to poultry breeding farms and poultry farmers. It believes in the advantages of united action to accomplish goals where individuals will not be in a position to accomplish on their own.

KPFBA has made a representation to the Finance Minister Nirmala Sitharaman on the need to incorporate poultry farming as ‘agriculture’, among other demands. While welcoming the objective of the government to ‘Double Farmers Income by 2022’, KPFBA President Mr. Akhilesh Babu said, “Poultry farming could help in this regard as agriculture farmers could take up poultry as a means of subsidiary income, if the government provides incentives. Poultry will play a key role in inclusive growth of the rural economy and thereby help to achieve the Government’s ambitious plan of  doubling farmers’ income.” The Recommendations from KPFBA

The Government must restore section 80JJ of the Income Tax Act 1961 giving income tax exemption for the poultry sector; allow deduction under section 80JJAA for workers in poultry farms and not just for those employed in a factory, and to exclude tax deduction at source (TDS) for poultry rearing farmers. At present, TDS of one / two percent is made to those who contract farmers for poultry rearing.  The major capital expenditure in the poultry sector goes for the construction of poultry sheds which last for 7 – 8 years and poultry cages which last for 5 – 6 years. The government should allow higher depreciation as it presently does for  ‘purely temporary’ sheds. As for cages, the Government should consider higher depreciation from the current 15%.

The government must allow the import of feed ingredients such as maize, corn, and medicines required by the sector without any restrictions on quantity and at zero % duty. The KPFBA further urged the government to make available sufficient and low-cost finance with subsidies to construct warehouses, cold storage facilities to store eggs and poultry meat products, which would help farmers, avoid making distress sale and ensures them with year-long regular income. Under section 40A(3) any expenditure exceeding Rs10, 000 made by way of cash is not allowable expenditure.  As the poultry Sector is carried out only in rural areas, and most of the workforce in rural and unskilled, and repairs and maintenance work is carried in villages and payments in these cases are difficult to make through the bank. It is requested to drop the applicability of this section to poultry Sector or at least for the payments made in rural areas.