AGRICULTURE INCOME

MADE BY:
ABHINAV KUMAR DEWALIYA
17FLICDDN02003
BALLB(HONS.)
SECTION - A
AGRICULTURE INCOME
 MEANING: The Income which received from
Agriculture source is called Agriculture
income.
 It is exempt from Income Tax
 But it is included in the TI of an assessee to

determine the rate of tax applicable on the

Non Agricultural Income
DEFINITION U/S 2(1A)
 Agriculture Income Is Fully Exempted as per Income
Tax act 1961 U/S 10(1)
 Agriculture Income includes the following

 Any Rent or Revenue derived from Agricultural Land

situated in India
 Any Income From
 Cultivation of Agriculture Land
 A process carried on to make the produce or rent in

kind marketable
 From sale of Agriculture produce
 Income from Agricultural House
 property
ESSENTIALS OF AGRICULTURE
INCOME
 Land must be situated in India.
 Land must be used for Agricultural purpose.
 Only the owner or cultivator can enjoy the

exemption.
 Agricultural Income include rent on land.
 Income from making the product fit for the

market is also agriculture income.

 If the cultivator or receiver of rent sells the

product directly, the income from sale of

such produce will be agriculture income.
REASON FOR NOT TAXING
AGRICULTURAL INCOME
 Sector in bad shape
 Many farmers leaving this sector
 Suicides
 Unreliable weather
 Lower prices offered by middlemen and

traders.

 So, the government does not want to curse

farmers more by levying taxes on them.
TYPES OF AGRICULTURE
 Rent or Revenue
 Cultivation of Land
 Income from a Process
 Income from Sale of Produce
 Income from Let out Agricultual House

Property
AGRICULTURAL INCOME
 Income from sale of replanted trees.
 Rent received from agricultural land.
 Income from growing flowers and creepers.
 Share of profit of a partner from a firm

engaged in agricultural operations.

 Interest on capital received by a partner from

a firm engaged in agricultural operations.

 Income derived from sale of seeds.
NON AGRICULTURAL INCOMES
 Income from poultry farming.
 Income from bee hiving.
 Income from sale of growing trees.
 Income from dairy farming.
 Purchase of standing crop.
 Royalty income from mines.
 Income from butter and cheese making.
 Income from salt produced
PARTLY AGRICULTURAL INCOME
From the composite income, for determining the non-agricultural chargeable to
tax, the market value of any agricultural produce which has been raised by the
assessee and which has been utilized as a raw material in such business, shall be
deducted.
Market value:
 average price at which it has been so sold if ordinarily sold for example of sugar

factories.
 when not ordinarily sold-

 The expenses of cultivation

 The land revenue or rent paid for the land on which it was grown

 The reasonable profit

 Income from growing and manufacturing of tea- 60% is AI,40%is NAI

 Income from growing and manufacturing of centrifuged latex- 65% is AI, 35%NAI

 Income from growing and manufacturing of coffee-

a)75%AI,25%NAI from the coffee grown and cured by the seller

b)60%AI,40%NAI from the coffee grown, cured, roasted and grounded
INTEGRATION OF AGRICULTURAL
INCOME

 MEANING: Clubbing of Agricultural Income

with Non Agricultural Income for the
Computation of tax Liability is known as
Integration of Agricultural Income.
CHART SHOWING INTEGRATION
 Non agricultural income + Agricultural
income = Aggregate Income
 Tax on aggregate income
 Agricultural income + maximum exempted

limit
 Tax on above total
 Deduct 4th point from the 2nd point
 Add education cess@3%
 Less TDS and Tax paid in advance = net tax

payable
THANK YOU