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Query regarding set off of agriculture loss

Ankur (na) (252 Points)

18 October 2011

hello friends , please help to sort out the following doubt,

suppose a person suffers huge loss in agriculture business in one year and next year he makes huge profits in agriculture business. now can he , in the next year , set off his previous agriculture loss from current agriculture profits to arrive at net agricultural income which is to be taken into account for rates purposes while calculating his tax liability in the current year???????

thanking in anticipation.

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17 Replies

Rahul Gupta (Chartered Accountant) (644 Points)
Replied 18 October 2011

Dear Agriculture Income is Tax Free Income so whats the benefit to set off the previous loss to ascertain the tax liability where the tax liability on Agriculture income whether Rs. 1 Lac or Rs. 10 Lac is always NIL.

I think there is no need to carry forward Agriculture Loss. Along with this agriculture loss cannot be set off against any other income as Income which is exempt the loss from the same source cannot be set off among others.

1 Like

CA VISHAL RANA,CS,B.Com,AMFI (Chartered Accountant in Whole Time Practice) (4354 Points)
Replied 18 October 2011

AGRICULTURE LOSS IS DEAD LOSS CAN'T BE SET OFF OR CARRY FORWARD

Harshal Fifadra (Chartered Accountant) (1489 Points)
Replied 18 October 2011

As per the basic rules of ITA,1961 the income which s exempt from TAX , the loss of it is not eligible for SET-OFF

A.K.Banik (Tax Consultant) (1596 Points)
Replied 19 October 2011

take it easy .

Agricultureal Income is an exempt source. so you can not set off any gain from that exempt source.

am i RIGHT ????

Mohammad Asif (chartered accountant) (191 Points)
Replied 19 October 2011

CANT SET OFF AGRICULTURAL LOSS

Kashif Mulla (CA Final Student) (38 Points)
Replied 19 October 2011

Hie everyone..

Agriculture loss can be set off and carry forawrd in the next year as to calculate your tax liabilty you need to first consider the agriculture and then deduct the same.

So if an assesee has an agriculture loss in the one year, the same can be forward and set off in the subsequent year.

So Certain points to be remembered;

(a) Agricultural income is considered for rate purpose while computing tax of Individual/HUF/AOP/BOI/Artificial Judicial Person.

(b) Losses from agricultural operations could be carried forward and set off with agricultural income of next eight assessment years.

Rahul Suneja (CA-Final, CS-Exec) (215 Points)
Replied 19 October 2011

Agricultural icome is exempt from income tax so there is no scope of setting off agricultural income in the subsequent years

(Guest)

Agricultural income is defined u/s 2(1A) and is computed under 3 heads.

a. Other Sources : THis loss cannot be carried forward

b. PGBP : This loss can be carried forward for 8 years

c. House property. : This loss can be carried forward for 8 years.

Thanks

https://taxbykk.blogspot.com/

1 Like

A.K.Banik (Tax Consultant) (1596 Points)
Replied 20 October 2011

Originally posted by : Mohammad Asif
	CANT SET OFF AGRICULTURAL LOSS

right .

CA Mangesh Chitale (B. Com. A.C.A. DISA (ICAI) DIRM (ICAI)) (245 Points)
Replied 20 October 2011

Kashif is absolutely right. The agricultural income is exempt but due to it, rate of tax on other incomes will be increased.

I dont not understand the opinion of Mr. Kaushal. Can anybody explain?

Rahul Gupta (Chartered Accountant) (644 Points)
Replied 20 October 2011

well kaushal sir can explain it well..

but i think he is trying to explain the all the treatment of income under the heads which also falls for Agriculture Income / Loss for computation

VISHAL SINGH (Chartered Accountant) (71 Points)
Replied 22 October 2011

As per Constitution of India,the central government does not have the power to levy tax on agricutural income,it is the state who can levy tax on it.Following are the extract of Constitution of India :Income tax is levied under Entry No. 82 of List I of Seventh Schedule to Constitution (Union List), which reads, ‘Tax on income other than agricultural income’. Entry No. 46 of List II of Seventh Schedule to Constitution (State List) reads, ‘ Taxes on agricultural income ‘.So off late, the department has made a separate arrangement to tax the agricultural income by indirect way. This indirect way is mentioned in the relevant finance act.-First Schedule-Part IV-Rules for Computation of Agricultural Income.i.e. by increasing the slab rate of tax.

To the best of my understanding you should get the set off of the losses in subsequent year for deciding the rate purpose.

Correct me if I am wrong.