Suppose X owns a farm house in an agricultural land where he grows Banana, Coconut etc. and also rears livestock for milk & meat.
He earns, say, ₹25 Lacs from harvest of crops and ₹40 Lacs from sale of milk and meat. He incurs expenses of around ₹30 Lacs which cannot be bifurcated.
Kindly provide details about how income should be divided as agricultural and non agricultural along with the computation.
Thank You.
Menu
Tax in case of both Agricultural & Non Agricultural Income from Agricultural Land
Replies (2)
To put in short:
Nature of business: Agriculture & Animal Husbandry/live stock rearing.
Income from Agriculture/harvest = 2500000 (exempt income).
Income from livestock business = gross receipts - expenses = 4000000-3000000 = 1000000 (taxable income) or else if return filed under presumptive taxation then taxable income @ 6% of credit/cheque receipts + @ 8% of cash receipts. Let us assume 1000000 received through cheque and 3000000 in cash. Then taxable income = 300000.
Total income = 1000000+300000
= 1300000.
Total exempt income = 250000+1000000
= 1250000.
Tax effect = tax on 1300000 - tax on 1250000 = 202500 - 187500 = 15000.
Less: rebate u/s 87a of Rs. 5000
Tax to be paid = 15000-5000= 10000.
For the A.Y. 2017-18
Nature of business: Agriculture & Animal Husbandry/live stock rearing.
Income from Agriculture/harvest = 2500000 (exempt income).
Income from livestock business = gross receipts - expenses = 4000000-3000000 = 1000000 (taxable income) or else if return filed under presumptive taxation then taxable income @ 6% of credit/cheque receipts + @ 8% of cash receipts. Let us assume 1000000 received through cheque and 3000000 in cash. Then taxable income = 300000.
Total income = 1000000+300000
= 1300000.
Total exempt income = 250000+1000000
= 1250000.
Tax effect = tax on 1300000 - tax on 1250000 = 202500 - 187500 = 15000.
Less: rebate u/s 87a of Rs. 5000
Tax to be paid = 15000-5000= 10000.
For the A.Y. 2017-18
But the 30L expenditure is not entirely ascertainable as to Non Agricultural so we have to make certain subjective calculations towards the expense allocable to non agricultural income and pay tax likewise.
Thank you!
Thank you!
Recent Topic
- 194JB INCOME
- Filing ITR3 where income under section 44AD with L
- What is superannuation fund
- GST Refund of input services under Inverted Duty S
- Dividend Reporting
- Real operational bottlenecks after firms use Tally
- Purchase return under gst
- Long Term Capital Loss - cannot be carried forward
- Cross-utilization of ITC between Trading and Resta
- Form 121 eligibility for non deduction of TDS for
Related Topics
CAclubindia
