15 September 2010
If a farmhouse is situated appurtent to the agricultural land and it's normally used for storage purpose then if for suppose a day or two it is rented for party then what is the rent recieved will be charged under??? also if the farm house was not used for any purpose than will it be charged under house property?? and also if the farm house was rented for whole period to a labour working on farm on fixed monthly wages then can it be claimed as a agricultural income???
16 September 2010
Income tax is charged on the income. Nature of income is decided by the activity to earn income.
Activity on the land are:
1. storage - Business Income. 2. Renting for party - Business income 3. Land not used for any purpose - No income because income from house property assessed in case of building or land appurtenant (annexed) to land. 4. Rented for whole period - business income or income from other sources; Given on contract, where farm house owner owns the crop / product - agriculture income; Wages paid to earn agriculture income - not permitted for set off against any other income.
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