Income from sale of sandal wood tree grown in agriculture land taxable or not

"Sorry, I am not a featured member."

For featured members contact....

https://www.caclubindia.com/catalogue/featured.asp

Likely exempt as agricultural income, if the trees are cultivated:

• Agricultural income (Sec 2(1A)) is exempt under Sec 10(1). Trees planted and grown through basic operations on land (tilling, sowing or planting, watering, weeding, tending) qualify. Naturally grown or spontaneous trees do not (SC, Raja Benoy Kumar Sahas Roy, 1957).

• Since you planted and have tended the sandalwood for 15 years, sale proceeds of the produce (heartwood) are agricultural income.

• Partial integration: agricultural income above Rs 5,000 is added to total income only to compute the slab rate on other income (old and new regime). It is not taxed itself.

• Records to keep: proof of land holding (patta or ROR showing agricultural use), planting and maintenance expenses, the forest or State permission for felling, and the sale document from the government depot or Forest Department.

• Sale of the land itself is a separate question: rural agricultural land is not a capital asset (Sec 2(14)(iii)), but urban land is.

• Report in ITR Schedule EI (exempt income). Above Rs 5 lakh of agricultural income, details of land and crop are required.