Matter of agriculture income calculation.

This query is : Resolved

Guest

Guest (Querist)

13 December 2012 GOOD AFTERNOON TO ALL EXPERTS,
I WANT TO ASK YOU ABOUT CALCULATION OF AGRICULTURE TAX.
HARE IS AN EXAMPLE PLZ TOLD ME THAT THIS CALCULATION IS RIGHT OR WRONG.
An assesse has his total income of Rs.220000 and agricultural income is Rs.300000.We know tax rate upto 500000 is 10% and upto 800000 is 20%. Now total income for tax purpose is Total income + agricultural income = 220000+300000 = 520000.
Now compute tax on it according to the above tax rates. is Rs.34000.Now computation of agricultural income tax exemption. It would be computed on(basic exemption limit + agricultural income) = 200000 + 300000 = 500000.
. Now compute tax on it according to the above tax rates is Rs.30000

Now deduct the agricultural income tax exemption from the income tax on total computed = actual tax - agricultural tax exemption = 34000 - 30000 = 4000
4000*10.3/100=412
4000+412=4412

MY QUERY STARTED NOW.
WHAT WILL MY TOTAL TAX LIABLITY . SHOULD IT 4412 OR 2060(2000*10.3/100=2060)

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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13 December 2012 Your computation is correct and your total tax liability is Rs.4412. ( assumption you basic tax exemption limit is Rs.200000)

OM SAI SRI SAI JAI JAI SAI

Guest

Guest (Querist)

13 December 2012 but sir should agriculture income not exempted income.

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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13 December 2012 Agricultural income is exempted income but tax purpose only it is taxable such adding of agricultural income while calculation of tax it increases the tax liability and then there is rebate in tax for agricultural income. So we can't say agricultural income is exempted. In my words agricultural income is taxable but it has tax rebate.

OM SAI SRI SAI JAI JAI SAI

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