Agricultural Income is exempt from tax if it comes within the definition of â€œ agricultural income â€ as given in Section 2(1A).
Definition Sec .2(1A) By virtue of this section 2(1A), â€œ agricultural income â€ means â€“ i. Â Any rent or revenue derived from land which is situated in India and is used for agricultural purposes. ii. Â 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. Â Any income derived from any building, farmhouse or land utilized in connection with cultivation of agricultural produce provided that- a)Â Â Â Â 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)Â Â Â 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 INCOME AND PARTLY FROM BUSINESS
Nature Of Business
|Â Agricultural Income
|Growing and Manufacturing Tea[Rule 8]
|Growing and Selling of Rubber[Rule 7A]
|Sale of Coffee grown and cured by the Seller [Rule 7B(1)]
|Sale of Coffee grown, cured, roasted and grounded by the seller with or without mixing chicory [Rule 7B(2)]
|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.