Tax on dairy income

Dear Dipesh,

Yes the income derived by means of selling milk is taxable under income tax act. For this we have to just check whether it comes with in the definition of agriculture income or not. As agricultural income is exempt from tax by virtue of section 10(1).

Section 2(1A) defines agricultural income as :-

Any rent or revenue derived from land, which is situated in India and is used for agricultural purposes.

Any income derived from such land by agricultural operations including processing of agricultural produce, raised or received as rent-in-kind so as to render it fit for the market or sale of such produce.

Income attributable to a farm house (subject to some conditions).

Income derived from saplings or seedlings grown in a nursery.

Selling of milk is not covered under any of the above clauses. So it will be taxable under head Income from Business or Profession.

Regards

Rohit Gupta

RHT1203 @ GMAIL.COM