Question: How Is Agricultural Income Rebate Calculated?

How much agricultural income is tax free?

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..

What are the types of agricultural income?

These types of agricultural incomes are :Any income received as rent or revenue from agricultural land. … Income derived from Agriculture. … Any income accruing to the person by the performance of any process to render the produce marketable.More items…

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.

How are agricultural income rebates 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 tax calculated with example?

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/-. … The amount of Tax shall be INR 10,000/-.

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 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.

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.

How much tax do farmers pay?

Farmers may have to pay 18% GST on the income earned through corporate farming, which the new laws are expected to promote.

What taxes do farmers have to pay?

The most important Federal taxes for farmers are the income tax, the self-employment tax, and the estate and gift tax. In 1996, the most recent year for which complete data are available, farmers paid about $19.2 billion in Federal income taxes on their farm and off-farm income.

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.

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

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.

Is 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. For details on what defines an agricultural land in a rural area, see details of capital assets here.

Is agricultural income fully exempted from income tax?

As per Section 10(1) of the Income Tax Act, 1961, agricultural income is exempted from taxation. The central government cannot levy tax on the agricultural income received. … Total income, excluding net agricultural income, surpasses the basic exemption limit (Rs. 2,50,000 for individuals below 60 years of age and Rs.

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.

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.

Is dairy farm income taxable?

Income from a DAIRY FARM i.e. producing milk from cows/buffalo & selling it in any manner-raw milk or value added products is Taxable like any other income. It is not to be treated as Agriculture Income which is income from anything which is grown on land & hence not Taxed. So, it is taxable. … Yes, it is taxable.