Agricultural Income (Section 2(1A) & 10(1)) Taxation Notes | EduRev

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Taxation : Agricultural Income (Section 2(1A) & 10(1)) Taxation Notes | EduRev

The document Agricultural Income (Section 2(1A) & 10(1)) Taxation Notes | EduRev is a part of the Taxation Course Fast Track Quick Revision Income Tax.
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Section 10(1). Agricultural Income is exempt from tax
Agricultural income as defined under section 2(1A) is fully exempt from tax but with a rider. Since agricultural income is exempt from tax it doesn’t form part of total income. Also Constitution of India gives exclusive powers to the State Legislature to make laws with respect to taxes on agricultural income. (Entry No. 46 of State List)

 

Section 2(1A). Meaning of Agricultural Income
(a) (b) (c)
Rent from agricultural
land situated in India
used for agricultural
purpose
Growing of crops from land situated in India. Also saplings in a nursery Rent from building
situated in the immediate
vicinity of agricultural
land situated in India
and used for agricultural
purpose and not situated
in urban area.
Exception : If let out
for purpose other than
agriculture then NAI
Basic
operation
Yes Yes  No
Subsequent
operation
Yes No   Yes
Whether
AI?
Yes Yes   No  
Computation u/h
Other Sources
Computation u/h
Business
Computation u/h
House Property
S 56 to 59 S 28 to 44D S 22 to 27
Rent xxx Sale of crops xxx GAV xxx
Less : taxes on
land
xxx Less : all business
expenses
xxx Less : MT xxx
Less : Collection
charges
xxx • Salary   NAV xxx
  • Irrigation expenses   Less : SD xxx
OSAI xxx • Depreciation   Less : Interest xxx
  BIAI xxx HPAI xxx

 

Computation of income which is partly agricultural & partly non agricultural
    AI NAI
Rule 7A Manufacture of rubber. 65% 35%
Rule 7B(1) Sale of coffee grown and cured by seller. 75% 25%
Rule
7B(1A)
Sale of coffee grown, cured, roasted and grounded by seller in India with or without mixing chicory or other flavouring ingredients. 60% 40%
Rule 8 Growing and manufacturing tea in India. 60% 40%

 

Computation of tax if assessee is earning both AI & NAI (Partial Integration)
1. The assessee is an individual or HUF or BOI, or AOP or artificial juridical person Computation of tax
2. Non-agricultural income i.e normal income exceeds basic exemption.
Tax on (NAI + AI) at slab rate A
Less : Tax on (AI + BE) at slab rate B
Tax A + B
3. Agricultural income exceeds Rs.5,000.

 

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