How Is Agricultural Rebate Calculated?

How is agricultural income rebate calculated?

Rebate Computation Process Step 1:Compute tax on the aggregate income (agricultural income + other income) according to the existing tax rate.

Step 2:Compute tax on the sum of the amount of basic exemption limit plus agricultural income as per the prevailing income tax rates..

How is agricultural income assessed?

Step 1: Add agricultural income and non-agricultural income and calculate tax on the aggregate as if such aggregate income is the Total Income. Step 2: Add agricultural income to the maximum exemption limit available in the case of the assessee and compute tax on such amount as if it is the Total Income.

How do you calculate gross income in agriculture?

Let’s calculate, Nitish income tax liability.Add agriculture income + non agriculture income. … Compute tax on the aggregate income.Add the basic tax exemption limit for the relevant financial year FY 2016-17, to the net agricultural income. … Calculate income tax on the aggregate amount which you have arrived at in STEP 3.More items…•Nov 5, 2016

What is agricultural income?

Agricultural income refers to the income earned or revenue generated from sources essentially premised on agricultural activities. These sources of income include farming land, buildings on or identified with agricultural land as well as commercial produce from a horticultural land.

What is exempted income?

Exempt Incomes are the incomes that are not chargeable to tax as per Income Tax law i.e. they are not included in the total income for the purpose of tax calculation while taxable Incomes are chargeable to tax under the Income Tax law. Exempt income are those on which tax is not likely to be paid.

Is sale of agricultural land taxable?

Agricultural land in Rural Area in India is not considered a capital asset. Therefore any gains from its sale are not taxable under the head Capital Gains. … Under Section 10(37) of the Income Tax Act, Capital Gains on compensation received on compulsory acquisition of urban agricultural land is exempt from tax.

How much agricultural income is tax free?

As of the latest amendment, income from agriculture, if within INR 5000 in a financial year, will not be accounted for tax purposes. Anything above that will be taxable as per the applicable rates.

Do farmers pay income tax?

Taxation of agricultural income As discussed above, agricultural income is exempt from income tax. However, the Income-tax Act has laid down a method to indirectly tax such income. This method or concept may be called as the partial integration of agricultural income with non-agricultural income.

What is agricultural land as per income tax?

Agricultural land has not been defined in the Income Tax Act but in common parlance, agricultural land is a land on which agricultural activities are carried out. … This is important because as per Section 2(14) of the I.T. Act, agricultural lands which are not situated in specified areas are not Capital assets.

Do farmers need to file income tax return?

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.

How do farmers file income tax returns?

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.

Are not treated as a agricultural income?

No, income from animal husbandry will not be considered as agricultural income. … Total income, excluding net agricultural income, surpasses the basic exemption limit (Rs. 2,50,000 for individuals below 60 years of age and Rs. 3,00,000 for individuals above 60 years of age.)

What is the exemption limit for agricultural income?

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. 3,00,000).

What are the kinds of agricultural income?

What Are The Types Of Agricultural Income?Sale proceeds from replanted trees.Sale proceeds of seeds.Rent received for agricultural land.Income from growing flowers and creepers.

Is fish farming taxable in India?

13. Whether Income from Fish Farming(Jhinga) is agricultural Income: Fish farming is not an agricultural activity as no basic agricultural operation is carried out on land hence income from fish farming is taxable as business income. However income of fish farming to a co-operative society is exempt u/s 80P of the Act.