Agriculture income or business income
This query is : Open
19 June 2026
Sir,
A client has started a nursery business on 6 acres of leased agricultural land. He purchases live plants ranging from 2 feet to 8 feet height from other nurseries. These plants are then maintained in the nursery for more than 6 months. During this period, labourers carry out watering, manuring/fertilizer application, pruning, cutting and other growth-related activities. The plants undergo substantial biological growth before being sold.
In these facts, whether the income from sale of such grown plants can be treated as Agricultural Income under Section 2(1A) of the Income-tax Act, 1961, or should it be assessed as Business Income?
A client has started a nursery business on 6 acres of leased agricultural land. He purchases live plants ranging from 2 feet to 8 feet height from other nurseries. These plants are then maintained in the nursery for more than 6 months. During this period, labourers carry out watering, manuring/fertilizer application, pruning, cutting and other growth-related activities. The plants undergo substantial biological growth before being sold.
In these facts, whether the income from sale of such grown plants can be treated as Agricultural Income under Section 2(1A) of the Income-tax Act, 1961, or should it be assessed as Business Income?
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