Income arrived from exempt source of income

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RAMANJU (Querist)

01 January 2015 Interest income accrued from Fixed Deposits which is sourced from exempt income viz Agricultural source & Exempt source u/s 10.

Query No. 1) Whether Interest income also exempt from tax as furtherance income of exempt income.

2) To substantiate the source of Income of Agriculture, owning agricultural land suffice?

3) To the extent of Rs. 1 crore as savings of agriculture. how much agricultural land should be owned in terms of measurement. how many years income to be clubbed as agricultural income?

Guest

Guest (Expert)

01 January 2015 No interest income is not exempt from tax..And land measurement is not much relevant it depends upon how much business you are creating and how much income you are showing in return of past years.

Ketan Shah

Ketan Shah (Expert)

01 January 2015 The reply to your query is as below:

1. Interest income of FDR is taxable under income from other sources.

2. To substantiate the agricultural income various proof may be required viz. proof of agricultural produce, proof of sale i.e. receipt from APMC or bill issued to seller, proof of receipt of payment.

3.The source of income need to have direct nexus with the income disclosed. So it will depend on the income tax returns filed by assessee and also on the supporting evidences available with the assessee.

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