business income 490000 and agricultural income 370000,showing tax 34000,how it is possible
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Quick Summary
This discussion clarifies how business income and agricultural income are taxed for AY 2020-21. It explains that agricultural income isn't fully exempt when combined with non-agricultural income, leading to partial taxability. A step-by-step calculation method is provided, demonstrating how to determine the final tax payable after considering exemptions, rebates, and cess.
Yes, it's all right.. because agriculture Income is not fully Exempt as you think, It's Exempt but if you have a agriculture income as well as non agriculture income, than its going to be partial Taxable as per prescribed method of calculation of tax in case of agriculture plus non agriculture Income.
1. Tax on (Agriculture + Non Agriculture income) 2. Tax on (Agriculture + Basic Exemption limit) 3. Tax Payable = Tax 1 - Tax 2 4. Less : rebate of Rs. 12,500/- if your Non agriculture income below 5,00,000 5. Add : 4% Cess 6. It's total tax payable.
in your case, 1. Tax on (4,90,000+3,70,000)= 84500 2. Tax on (3,70,000+2,50,000)= 36,500 3. 84500-36500= 48000 4. less : rebate 12,500 so, comes 35,500 5. Add 4% cess (4% of 35500=1420) 6. total payable 36920