What Is Agriculture Income

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.

Agriculture meaning social studies. As mentioned earlier certain agriculture related works and the income thus generated is categorised as non agricultural income and is taxable. From the surface it appears that agriculture income is exempt from income tax but its not as easy as it appears. What is agricultural income.

However it is included for tax rate purpose in computing the total income tax liability if following two conditions are cumulatively satisfied. The government has introduced different measures policies and schemes to promote growth in the agriculture sector. Agricultural income means a any rent or revenue derived from land which is situated in india and is used for agricultural purposes.

According to this section agricultural income generally means. Though agricultural income is exempt from income tax the act has laid down a method to indirectly tax such income. The indian income tax act of 1961 has given a definition of agricultural income under section 2a.

A farm income statement sometimes called a farm profit and loss statement is a summary of income and expenses that occurred during a specified accounting periodthis period is usually the. Net agricultural income is more than inr 5000. However there is a limit of tax exemption on agricultural income.

When an agricultural produce undergoes a process to become marketable the final product is categorised as non agricultural. The income attributable to agricultural operations ie raising of sugarcane is agricultural income and the income attributable to industrial operations ie manufacturing sugar from sugarcane is non agricultural income. In the below read we will understand in detail what is agricultural income and what is the nitty gritty of agricultural income taxation.

B any income derived from such land by. This method or concept is called as the partial integration of agricultural income with non agricultural income. The above total income of mr.

Agricultural income is defined under section 21a of the income tax act 1961. Read more about the taxation of this income here. X is the composite income comprising of agricultural income and non agricultural income.