how rebate on agriculture income is to be calculated? and what is the exemption limit of agricultural income..............
Juzer Sadikot
(CA - innovative solutions for Imports and Exports)
(1309 Points)
Replied 09 November 2008
Dear Rakesh.
Rebate u/s. 88D is Omitted by the Finance Act, 2005, w.e.f. 1-4-2006.
Since then agriculture Income is exempt u/s. 10(1) and will be added to total income for for determining the slab at which income tax will be levied. In simple terms for eg.
For A.Y. 2009-10.
If Mr. having total income of Rs. 2,25,000/- and net agriculture Income of Rs. 1,25,000/-
Tax will be computed as
Tax on Total Income + Agriculture Income
(225000+125000 = 350000) = (150000*0% +150000*10%+50000*20%) = 25000/- (excluding surcharge & cess)
Tax on income which is not chargeble to tax + Agriculture income (you can say it rebate)
(150000+125000 = 275000) =(150000*0% + 125000*10%)= 12500/- (excluding surcharge & cess)
Tax on total Income
(225000) = (150000*0 + 75000*10%) = 7500/- (excluding surcharge & cess)
Wereas total tax payable in respect to total income and net agriculture income will be
Rs. 25000 (Total tax on TI & AI) - Rs. 12500 (Rebate) = Rs. 12500/-(excluding surcharge & cess)
Conditions for above.
Agriculture income is to be more than Rs. 5000/-
Total Income is to be more than amount which is not chargeble to tax.
Etract from finance act 2008 for your understanding is as under.
(1) Subject to the provisions of sub-sections (2) and (3), for the assessment year commencing on the 1st day of April, 2008, income-tax shall be charged at the rates specified in Part I of the First Schedule and such tax as reduced by the rebate of income-tax calculated under Chapter VIII-A of the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act) shall be increased by a surcharge for purposes of the Union calculated in each case in the manner provided therein.
(2) In the cases to which Paragraph A of Part I of the First Schedule applies, where the assessee has, in the previous year, any net agricultural income exceeding five thousand rupees, in addition to total income, and the total income exceeds one lakh ten thousand rupees, then,—
(a) the net agricultural income shall be taken into account, in the manner provided in clause (b) [that is to say, as if the net agricultural income were comprised in the total income after the first one lakh ten thousand rupees of the total income but without being liable to tax], only for the purpose of charging income-tax in respect of the total income; and
(b) the income-tax chargeable shall be calculated as follows:—
(i) the total income and the net agricultural income shall be aggregated and the amount of income-tax shall be determined in respect of the aggregate income at the rates specified in the said Paragraph A, as if such aggregate income were the total income;
(ii) the net agricultural income shall be increased by a sum of one lakh ten thousand rupees, and the amount of income-tax shall be determined in respect of the net agricultural income as so increased at the rates specified in the said Paragraph A, as if the net agricultural income as so increased were the total income;
(iii) the amount of income-tax determined in accordance with sub-clause (i) shall be reduced by the amount of income-tax determined in accordance with sub-clause (ii) and the sum so arrived at shall be the income-tax in respect of the total income:
Provided that in the case of every woman, resident in India and below the age of sixty-five years at any time during the previous year, referred to in item (II) of Paragraph A of Part I of the First Schedule, the provisions of this sub-section shall have effect as if for the words “one lakh ten thousand rupees”, the words “one lakh forty-five thousand rupees” had been substituted:
Provided further that in the case of every individual, being a resident in India, who is of the age of sixty-five years or more at any time during the previous year, referred to in item (III) of Paragraph A of Part I of the First Schedule, the provisions of this sub-section shall have effect as if for the words “one lakh ten thousand rupees”, the words “one lakh ninety-five thousand rupees” had been substituted:
Provided also that the amount of income-tax so arrived at, as reduced by the amount of rebate of income-tax calculated under Chapter VIII-A of the Income-tax Act, shall be increased by a surcharge, for purposes of the Union, calculated in each case in the manner provided in that Paragraph and the sum so arrived at shall be the income-tax in respect of the total income.
Regards
sachin patil
(Accountant)
(102 Points)
Replied 23 February 2009
amit kumar sinha
(m.a)
(21 Points)
Replied 23 November 2012
how many rebate on agriculture income
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