(PTI) Finance Minister Arun Jaitley today warned of action against those passing off income from other sources as agriculture income but ruled out levying any tax on farm earnings.

Replying to the discussion on the Finance Bill 2016 in the Lok Sabha, he also ruled out withdrawal of the 1 per cent excise duty on non-silver jewellery, a demand that was made by opposition Congress and ruling NDA constituent Shiv Sena.

The Minister said the government will act tough against those found to holding illegal offshore accounts as revealed in the Panama Papers leak under the recently passed stringent blackmoney law.

In his hour-long reply, the Minister dwelt at length on the challenges facing the Indian economy and said the government will work to resolve the NPA problem of banks.

After the reply, the House passed the Finance Bill that marks the culmination of the three-stage budgetary process in the Lok Sabha. The Bill will now go to Rajya Sabha.

"There are two categories. One is honest agricultural income. You may have a large income which is a separate case.

That is a rare case. But there are some cases where people are passing off income from other sources as agriculture income.

That is a case of evasion. That will be dealt with under the law. That the assessing officer can deal with," he said.

Jaitley said there was no proposal to tax agriculture income. "This cateogry of people earning from agriculture in crores is very little. In any case, please remember, under the Constitution of India, the Centre has no power. It is a State subject."

The remarks assume significance in the context of a recent discussion on the issue in Rajya Sabha where Jaitley had warned Congress leaders not to cry political vendetta if he were to disclose those hiding other income as agri income.

Ruling out roll back of one per cent excise duty levied on non-silver jewellery, Jaitley took jibe at the Congress for its hatred for "suits" but love gold.

"I am unable to understand this politics, this economics where you hate suits but are in love with gold," he said adding the duty was not targeted at small traders and artisans but would be levied only on jewellers with ₹ 12 crore turnover in a year. .

Tax evasion enforcement: government to target misclassification of income as agricultural and pursue offshore concealment. Enforcement will target misclassification of non-agricultural receipts as agricultural income, to be addressed by the assessing officer; genuine agricultural income will not be taxed and lies outside Centre's power. The government will use the black money law against illegal offshore accounts revealed in the Panama Papers, and maintains a one per cent excise duty on non-silver jewellery applicable to jewellers above the turnover threshold.