AGRICULTURE INCOME EXEMPTION 10(1)

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Partnership firms can claim exemption for agriculture income under Section 10(1) of the Income-tax Act, even without owning the land; leasing is sufficient. This income is exempt in the hands of the firm, and the partners' share of profits from this income is also exempt from tax. Agricultural income is defined under Section 2(1A) and includes rent from agricultural land, income from agricultural operations, and certain farmhouse income.

Hemkumar

Hemkumar

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16 December 2023 A Partnership firm can show agriculture income and claimed exemption under section 10(1) ?? ownership of land required ??

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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16 December 2023 Yes, land ownership not required leasing of land allowed.

Hemkumar

Hemkumar

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16 December 2023 what is taxability in the hands of partnership firm & in the hands of partners ? and can u share any relevant extract of law ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 December 2023 In the hands of the firm agriculture income is exempt.
Share of profit from the firm is exempt in the hands of partner.

Agricultural Income [Section 10(1)]
As per section 10(1), agricultural income earned by the taxpayer in India is exempt from tax. Agricultural income is defined under section 2(1A) of the Income-tax Act. As per section 2(1A), agricultural income generally means: (a) Any rent or revenue derived from land which is situated in India and is used for agricultural purposes. (b) Any income derived from such land by agriculture operations including processing of agricultural produce so as to render it fit for the market or sale of such produce. (c) Any income attributable to a farm house subject to satisfaction of certain conditions specified in this regard in section 2(1A).

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