taxability of salary and agriculture income

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abhishek singh (Querist)
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10 April 2017 my father is a govt employee and earns 5 lakh annualy in addition to that he also hold some agricultural land from which he earns 1.5 lakh as agriculture income annualy. so my que is that, is his agriculture income is taxable along with salary income? if no than what is agriculture income integration method?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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10 April 2017 Agricultural income is not taxable. But taken for aggregation to determine applicable slab rates for taxable income. Tax on 6.50 Lacs(including agricultural income) will be calculated and tax on 3.50 Lacs(basic exemption limit plus agricultural income) will be reduced for calculation of tax payable.

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abhishek singh

abhishek singh (Querist)
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10 April 2017 so tax will also be given on agriculture income. you r saying that agriculture income is not taxable how it is possible.

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CA Manali Maniar

CA Manali Maniar (Expert)
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10 April 2017 By default, agricultural income is exempted from taxation and not included under total income. The Central Government can’t impose or levy tax on agricultural income. The exemption clause is mentioned under Section 10 (1) of the Income Tax Act of India.

However, state governments can charge agricultural tax. As of the latest amendment, income from agriculture, if within INR 5000 in a financial year, will not be accounted for tax purposes. Anything above that will be taxable as per the applicable rates. As per the finance act, the total tax liability for a person would include the agriculture income added to the non-agricultural portion.

Though being exempted from tax through Section 10 (1), tax on agricultural income still persists in the state level if the mentioned income exceeds INR 5000 per year and if the total income excluding agricultural income is more than the basic exemption limit. For firms, non-individuals and companies it is easier to pay the associated tax as the tax is charged at a flat rate on the chargeable income. For salaried individuals, it might increase the tax they need to pay because of the aggregation of income.

CA Manali Maniar

CA Manali Maniar (Expert)
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abhishek singh

abhishek singh (Querist)
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10 April 2017 it is quite confusing please tell me wether my father liable to tax on agriculture income or not? we belong to up. if liable than how much.

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 April 2017 Due to showing agricultural income of 1.50 Lacs the tax payable on 5 Lacs income increased by 15000.

abhishek singh

abhishek singh (Querist)
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12 April 2017 thank u sir, so we can say that in my father case agriculture income is exempt only when there is no other income.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 April 2017 Yes you can indirectly say so.

abhishek singh

abhishek singh (Querist)
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