Corporate India has demanded that agriculture income should be taxed as a measure to widen the tax base, besides cut in corporate tax rates and phasing out exemptions as part of their wish-list for the Budget 2004-05.

Responding to questionnaire, industry captains said they wanted reduction in indirect tax rates to make them globally competitive.

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Industrialists supported an early introduction of value-added tax and roping in of more services under the service tax net.

On the controversial issue of taxing farm income, apex chambers like the Confederation of Indian Industry CII and the Federation of Indian Chambers of Commerce and Industry said government should treat it at par with any other income and a beginning should be made by bringing income from organised farm sector under the tax net.

"Time is ripe to tax agriculture income. Agriculture should be taxed beyond Rs 500,000 at a flat rate of say 15 per cent," FICCI said. CII said that equitable treatment of all income earners would imply that agriculture income cannot be treated differently from any other income.

PHDCCI said it will not be easy to levy tax on farm income unless agriculture activity is organised.

Admitting that it was difficult to tax farm income as the sector was fragmented and the issue was politically sensitive, Indian Merchant Chamber president, Nanik Rupani said, "There is a need to have a phased programme of taxing agricultural income. It will be prudent to make a beginning to organised farm sector.