Agricultural Income is exempt from tax if it comes within the definition of “agricultural income” as given in Section 2(1A).
Definition Sec .2(1A) By virtue of this section 2(1A), “agricultural income” means –
i. Any rent or revenue derived from land which is situated in India and is used for agricultural purposes.
ii. Any income derived from such land by agricultural operations including processing of the agricultural produce, raised or received as rent-in-kind so as to render it fit for the market, or sale of such produce; and
iii. Any income derived from any building, farmhouse or land utilized in connection with cultivation of agricultural produce provided that-
a) The land concerned is either assessed to land revenue or local rates and is not situated within 8 km of such municipal limits, and
b) The building or land concerned is situated in the immediate vicinity of the agricultural land and is utilized as a dwelling house, store house or as other out building.
HIGHLIGHTS OF THE PROVISIONS OF INCOME WHICH IS PARTIALLY AGRICULTURAL AND PARTLY FROM BUSINESS
Nature Of Business
| Business Income | Agricultural Income |
| Growing and Manufacturing Tea [Rule 8] | 40% | 60% |
| Growing and Selling of Rubber [Rule 7A] | 35% | 65% |
| Sale of Coffee grown and cured by the Seller [Rule 7B(1)] | 25% | 75% |
| Sale of Coffee grown, cured, roasted and grounded by the seller with or without mixing chicory [Rule 7B(2)] | 40% | 60% |
| For other Composite Business [Rule 7] | In computing Business Income the Market Value of the agricultural produce is to be deducted. | Market Value of Agricultural Products. |
Nature Of Business
| Business Income | Agricultural Income |
| Growing and Manufacturing Tea [Rule 8] | 40% | 60% |
| Growing and Selling of Rubber [Rule 7A] | 35% | 65% |
| Sale of Coffee grown and cured by the Seller [Rule 7B(1)] | 25% | 75% |
| Sale of Coffee grown, cured, roasted and grounded by the seller with or without mixing chicory [Rule 7B(2)] | 40% | 60% |
| For other Composite Business [Rule 7] | In computing Business Income the Market Value of the agricultural produce is to be deducted. | Market Value of Agricultural Products. |
Nature Of Business
| Business Income | Agricultural Income |
| Growing and Manufacturing Tea [Rule 8] | 40% | 60% |
| Growing and Selling of Rubber [Rule 7A] | 35% | 65% |
| Sale of Coffee grown and cured by the Seller [Rule 7B(1)] | 25% | 75% |
| Sale of Coffee grown, cured, roasted and grounded by the seller with or without mixing chicory [Rule 7B(2)] | 40% | 60% |
| For other Composite Business [Rule 7] | In computing Business Income the Market Value of the agricultural produce is to be deducted. | Market Value of Agricultural Products. |
Nature Of Business
| Business Income | Agricultural Income |
| Growing and Manufacturing Tea [Rule 8] | 40% | 60% |
| Growing and Selling of Rubber [Rule 7A] | 35% | 65% |
| Sale of Coffee grown and cured by the Seller [Rule 7B(1)] | 25% | 75% |
| Sale of Coffee grown, cured, roasted and grounded by the seller with or without mixing chicory [Rule 7B(2)] | 40% | 60% |
| For other Composite Business [Rule 7] | In computing Business Income the Market Value of the agricultural produce is to be deducted. | Market Value of Agricultural Products. |
Nature Of Business
| Business Income | Agricultural Income |
| Growing and Manufacturing Tea [Rule 8] | 40% | 60% |
| Growing and Selling of Rubber [Rule 7A] | 35% | 65% |
| Sale of Coffee grown and cured by the Seller [Rule 7B(1)] | 25% | 75% |
| Sale of Coffee grown, cured, roasted and grounded by the seller with or without mixing chicory [Rule 7B(2)] | 40% | 60% |
| For other Composite Business [Rule 7] | In computing Business Income the Market Value of the agricultural produce is to be deducted. | Market Value of Agricultural Products. |
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