compution of agricultural Income

Agriculture income alone is exempt u/s 10(1)...

Whereas a separate calculation is there if agricultural income exceeds 5000 and non agricultural income exceeds basic exemption limit..

calucation of tax:

step1 : calculate tax liability by including agricultural income in total income
step2 : calculate rebate allowed to agricultural income...
Lower of the following is rebate
a) calculate tax on non agricultural income only....
b) calculate tax on aggregate of agricultural income and basic exemption limit (2.5/3/5 lakhs as the case may be)
step3: step1 - step 2

here the tax liability is step 3 and proceed further to add cess and surcharge as applicable...