13 January 2018
Tea estate, rubber estate or coffee estate sell green tea leaves, raw rubber or raw coffee etc. purely agricultural income
Sale of agricultural produce will result into deriving agricultural income even if the owner of estate is normally engaged in combined agricultural and manufacturing activities. For example in a tea estate tea leaves are cultivated, manufactured and sold- this results into combined income consisting of agricultural and business income. As per Rule 8 40% of such combined income is chargeable to tax under the income-tax Act and balance 60% is considered as agricultural income on which the state government may impose tax as tax on agricultural income. When a tea estate sell some green tea leaves, the income is not mixed income but purely agricultural income.
14 January 2018
If you have only agricultural income you will get tax exemption no need to fill in exempted income you can fill in agriculture income automatically it will consider as exempted income, but if you have any other income from other head. it is included for tax rate purpose in computing the total Income-tax liability if following two conditions are cumulatively satisfied:
1. Net agricultural income is more than INR 5,000/- . and 2. Total income, excluding net agricultural income is more than basic exempt slab limit (i.e. INR 2, 50,000/- In case above 2 conditions are satisfied then tax is computed as under: Step 1 - Compute Income-tax liability on total income including agricultural income. Step 2 -Compute tax rebate on agricultural Income. Tax rebate on agricultural income is Income-tax computed on total of agricultural Income + basic exempt slab limit Step 3 - Subtract amount computed in Step 2 from amount computed in Step 1 to get the amount for total tax payable by the Individual.
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