. Agriculture Income
According to Sec. 2(1A) Agriculture Income means :
a) Any rent or revenue derived from land, which is situated in India and is used for agricultural purposes.
b) Any income derived from such land by agricultural operations including processing of the agricultural produce raised or received rent-in-kind so as to render it fit for the market for sale of such produce; and
c) Income attributable to a farm house subject to the condition that the building is situated on or in the immediate vicinity of the land and used as a dwelling house, store house or other out building and the land is assessed to land revenue or a local rate or in the alternative, the building is situated on or in the immediate vicinity of land which (though not assessed to land revenue or local rate) is situated outside the urban areas, i.e. any area which is comprised within the jurisdiction of a municipality or cantonment board having a population of ten thousand or more or in any area within eight kilometers from the local limits of such municipality or cantonment board.
Important :
Sec. 10(1) exempts agriculture income from income tax. But it is taken for rate purpose.
2. Integration of agriculture income with non-agriculture income :
The partial integration is done to compute the tax on non-agricultural income only when the following two conditions are satisfied:
(i) The tax payer has non agricultural income exceeding the amount of exemption limits (i.e. Rs. 190000) (in the case a resident woman below 65 yrs.), Rs. 240000 (in the case of a resident seniorBusiness Income : The sale proceeds received from biscuits less the fair market value of wheat when it is utilised in the business and subsequent experses incurred for manufacturing of biscuits.
4. Tea Business (Rule 8)
The income in respect of the business of growing tea leaves and manufacturing tea is in the first instance computed under the Act as if it were derived from business. After making permissible deductions, 40% of the income so arrived at is treated as business income and the balance 60% is treated as agricultural income. Salary and profit received by a partner from a firm (growing leaves and manufacturing tea) is taxable only to the extent of 40% and the balance 60% is treated as agricultural income. But dividend received from a company, growing leaves and manufacturing tea, is not apportionable in the aforesaid manner.
5. Rubber business (Rule 7A)
Income derived from the sale of centrifuged latex or cenex or latex based crepes (such as pale latex crepe) or brown crepes (such as estate brown crepe, remilled crepe, smoked blanket crepe or flat bark crepe) or technically specified block rubbers manufactured or processed from field latex or coagulum obtained from rubber plants grown by the seller in India shall be computed as if it were income derived from business, and 35% of such income shall be deemed to be income liable to tax. The balance 65% shall be deemed as agriculture income.
6. Coffee business (Rule 7B)
Income from the sale of Coffee grown and manufactured in India is dealt as under :
a) where income is derived from the sale of coffee grown and cured, 25% shall be deemed to be business income liable to tax and the remaining 75% will be deemed as agriculture income.
b) apart from sale of coffee grown and cured if assessee is engaged in roasting and grounding of coffee then 40% shall be deemed as business income liable to tax and remaining 60% will be deemed as agriculture income.
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According to Sec. 2(1A) Agriculture Income means :
a) Any rent or revenue derived from land, which is situated in India and is used for agricultural purposes.
b) Any income derived from such land by agricultural operations including processing of the agricultural produce raised or received rent-in-kind so as to render it fit for the market for sale of such produce; and
c) Income attributable to a farm house subject to the condition that the building is situated on or in the immediate vicinity of the land and used as a dwelling house, store house or other out building and the land is assessed to land revenue or a local rate or in the alternative, the building is situated on or in the immediate vicinity of land which (though not assessed to land revenue or local rate) is situated outside the urban areas, i.e. any area which is comprised within the jurisdiction of a municipality or cantonment board having a population of ten thousand or more or in any area within eight kilometers from the local limits of such municipality or cantonment board.
Important :
Sec. 10(1) exempts agriculture income from income tax. But it is taken for rate purpose.
2. Integration of agriculture income with non-agriculture income :
The partial integration is done to compute the tax on non-agricultural income only when the following two conditions are satisfied:
(i) The tax payer has non agricultural income exceeding the amount of exemption limits (i.e. Rs. 190000) (in the case a resident woman below 65 yrs.), Rs. 240000 (in the case of a resident seniorBusiness Income : The sale proceeds received from biscuits less the fair market value of wheat when it is utilised in the business and subsequent experses incurred for manufacturing of biscuits.
4. Tea Business (Rule 8)
The income in respect of the business of growing tea leaves and manufacturing tea is in the first instance computed under the Act as if it were derived from business. After making permissible deductions, 40% of the income so arrived at is treated as business income and the balance 60% is treated as agricultural income. Salary and profit received by a partner from a firm (growing leaves and manufacturing tea) is taxable only to the extent of 40% and the balance 60% is treated as agricultural income. But dividend received from a company, growing leaves and manufacturing tea, is not apportionable in the aforesaid manner.
5. Rubber business (Rule 7A)
Income derived from the sale of centrifuged latex or cenex or latex based crepes (such as pale latex crepe) or brown crepes (such as estate brown crepe, remilled crepe, smoked blanket crepe or flat bark crepe) or technically specified block rubbers manufactured or processed from field latex or coagulum obtained from rubber plants grown by the seller in India shall be computed as if it were income derived from business, and 35% of such income shall be deemed to be income liable to tax. The balance 65% shall be deemed as agriculture income.
6. Coffee business (Rule 7B)
Income from the sale of Coffee grown and manufactured in India is dealt as under :
a) where income is derived from the sale of coffee grown and cured, 25% shall be deemed to be business income liable to tax and the remaining 75% will be deemed as agriculture income.
b) apart from sale of coffee grown and cured if assessee is engaged in roasting and grounding of coffee then 40% shall be deemed as business income liable to tax and remaining 60% will be deemed as agriculture income.
More Detail:-http://www.gurukpo.com
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