What is agricultural income?
Any income or revenue derived from sources like farming lands, buildings constructed on or identified with agricultural land, and the commercial produce received from agricultural land is known as agricultural income. Section 2(1A) of the Income Tax Act, 1961 lays down the definition of agricultural income.
What is agricultural income and non-agricultural income?
Net agricultural income is greater than Rs. 5,000 during the year; and. Non-agricultural income is: Greater than Rs. 2,50,000 for individuals below 60 years of age and all other applicable persons.
Is agriculture income a business income?
Agricultural income is not taxable under Section 10 (1) of the Income Tax Act as it is not counted as a part of an individual’s total income. However, the state government can levy tax on agricultural income if the amount exceeds Rs. 5,000 per year.
Which incomes are not agricultural income?
Taxation of agricultural income This means that the non-agricultural income should be more than Rs 2.50 lakhs for individuals below 60 years. It should be more than Rs 3 lakhs for farmers aged between 60 and 80 years. For people aged over 80 years, the non-agricultural income should be over Rs 5 lakhs, to be taxable.
What is agricultural income in simple words?
Agricultural income refers to income earned or revenue derived from sources that include farming land, buildings on or identified with an agricultural land and commercial produce from a horticultural land. Agricultural income is defined under section 2(1A) of the Income Tax Act, 1961.
Do farmers pay income tax?
Farmers may have to pay 18% GST on the income earned through corporate farming, which the new laws are expected to promote. As per Section 2 (1A) in the ITA, agricultural income means any rent or revenue derived from land located in India, including rent on agricultural land and buildings, and is tax-exempt.
What is agricultural income example?
Examples of Agricultural Income Income from sale of seeds. Rent received for agricultural land. Income from growing flowers and creepers. Profits received from a partner from a firm engaged in agricultural produce or activities.
How is agriculture income calculated?
Example – Let us say that an Individual Assessee has a Total income of INR 7,50,000/- (excluding Agricultural income) and a Net Agricultural income of INR 100,000/-. Then, per this step, Tax shall be computed on INR 7,50,000/- + INR 1,00,000/- = INR 8,50,000/-.
How do you prove agricultural income?
In respect of agricultural income, the indicative list of documents may be pertaining to land acquisition or ownership, details and location as per municipal records, evidence of agricultural use, lease agreement, tenant details, rent receipts, bank statements (if rent was received through modes other than cash).
How is agricultural income calculated?
Do farmers need to file income tax return?
If the aggregate agricultural income of the assessee is up to Rs. 5,000 disclose the agricultural income in the income tax return (ITR) 1. But if the agricultural income exceeds Rs. 5,000, then form ITR 2 applies.
What is the limit of agriculture income?
Net agricultural income is greater than Rs. 5,000/- for the previous year. Total income, apart from net agricultural income, is higher than the basic exemption limit (Note – Base Exemption Limit for taxpayers up to 60 years of age is Rs. 2,50,000 and for taxpayers exceeding 60 years of age is Rs.
Is agriculture income tax free?
According to Section 10(1) of the Income Tax Act, agricultural income is not considered a means of income. Income generated from agriculture is exempted from taxation by the Central Government.
What is the proof of agricultural income?
Which amount is tax free?
Therefore, under the new tax regime, basic exemption limit will remain Rs 2.5 lakh for all taxpayers.” Do keep in mind that only individuals having no business income in a financial year are eligible to choose between both the tax regimes every year.