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Agriculture Income

Ashish Bhatt ( B.COm C.A FINAL (New)) (493 Points)

03 January 2011

Hello Friends. I have a problem please help me. A person have a agriculture Land & he is croping Flowers on this land. Is that income arise from the sale of Flowers is Taxable or Exempt as it is a agriculture Income? What will be the treatment if we sold this Land? Capital gain ariese from it will taxable or we need to purchase some other agriculture land for Tax Saving? Than you in Advance Ashish Bhatt

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Agriculture income is exempt under the Indian Income Tax Act i.e income earned from agricultural operations is not taxed. The reason for exemption of agriculture income from Central Taxation is that the Constitution gives exclusive power to make laws with respect to taxes on agricultural income to the State Legislature. However while computing tax on non-agricultural income agricultural income is also taken into consideration.

Income from growing flowers and creepers is an agricultar income so its exempt from Income tax.

capital gains are applicable only when you are selling the capital assests. If agricultural land is coming under any area which is comprised within the jurisdiction of a municipality or a cantonment board which has a population of not less than ten thousand then the land is not agricultural land and if its not an agricultural land then you have to pay tax on its sale, otherwise there is no tax if its an agricultural land.

(you can also claim exemption from capital gain on sale of agriculture land u/s 54B)

Ashish Bhatt ( B.COm C.A FINAL (New)) (493 Points)
Replied 04 January 2011

Thanks for your support. Please also tell me. If Land is not agriculture & we are croping Flowers & seling the same. Is this Income will be Exempt or Not. Whether it will be affect Land must be Agriculture or not? Please reply as soon as possible.