Assam announces the return of income tax for high-earning farmers while increasing exemption limits for small tea growers, aiming to balance revenue with sector support in its latest budget.
Assam will restore agricultural income tax for larger earners while keeping small tea growers and farmers with annual agricultural income of up to Rs 10 lakh outside the tax net, Chief Minister Himanta Biswa Sarma said on Tuesday in Guwahati. Sarma said the change is aimed at drawing a sharper line between small-scale growers and bigger assessees, with the state seeking to protect smaller operators from added costs.
The decision follows the Assam budget for 2026-27, which proposed lifting the exemption threshold for small tea growers from Rs 2.5 lakh to Rs 10 lakh a year. Business Standard reported that the state’s Finance Minister, Jayanta Malla Baruah, tabled a ₹2.85 lakh crore budget for the year, with the government also targeting a sharp reduction in the fiscal deficit. India Today NE reported that the restored tax on larger assessees would take effect from April 1, 2026.
Sarma said the extra revenue would be used for the welfare and development of tea garden communities, according to his remarks to reporters. The government has argued that income levels in agriculture vary widely depending on farm size, output, market prices and spending, making a broad exemption less effective than a more targeted one. The move is meant to spare small tea growers while ensuring larger agricultural businesses contribute more to state revenue.
The budget also signalled broader support for the tea sector. According to reports on the 2026-27 plan, Assam proposed raising the production subsidy for orthodox and speciality tea from Rs 10 to Rs 15 per kilogram and extending support to premium varieties including Matcha. The state also already operates a cess utilisation policy that channels funds towards the development of small and marginal tea growers, tea labour welfare and quality improvements in the industry.
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