Yes, agricultural income is generally exempt from income tax in India. However, if the agricultural income exceeds a certain threshold and is not derived from land located in specified rural areas, it may be taxable under certain circumstances.
And now, a closer look
Agricultural income in India is generally exempt from income tax. This is established in Section 10(1) of the Income Tax Act, 1961, which states that agricultural income is not considered a part of total income for tax purposes. However, there are certain conditions that need to be fulfilled in order for this exemption to apply.
Firstly, the income must be derived from agricultural land. Any income generated from activities such as dairy farming, poultry farming, or beekeeping, which are not directly related to land cultivation, may not qualify for the exemption.
Secondly, the exemption applies to agricultural income earned by individuals (including HUFs or Hindu Undivided Families) and not to agricultural income earned by companies or firms. Therefore, if you are running your agricultural activities through a business entity, the income may be taxable.
Thirdly, there is a threshold limit that determines whether agricultural income is taxable or exempt. Currently, there is no specific threshold limit defined in the Income Tax Act. Instead, the determination of taxable agricultural income depends on various factors such as the location of the land and the nature of the income. If the agricultural income exceeds the specified threshold and is not derived from land located in specified rural areas, it may be taxable under certain circumstances.
It’s important to note that each state in India has the power to levy and collect agricultural income tax, but as of now, very few states exercise this power. Therefore, in most parts of India, agricultural income remains exempt from both central and state income tax.
To further elaborate, here are some interesting facts about agricultural income in India:
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“Agriculture is the backbone of Indian economy.” This quote emphasizes the significance of agriculture in India’s overall economic development.
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Agriculture contributes approximately 17-18% of India’s GDP and employs more than half of the country’s workforce.
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As per the Agricultural Census of 2015-16, there are over 146 million operational holdings in India, covering an area of around 159 million hectares.
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India is one of the largest producers of various agricultural commodities such as rice, wheat, cotton, sugarcane, and spices. It is also the world’s largest producer of milk.
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Despite its importance, the agricultural sector in India faces numerous challenges including fragmented land holdings, shrinking farm incomes, climate change impact, and limited access to modern technology and credit facilities.
In conclusion, agricultural income in India is generally exempt from income tax. However, there are conditions and thresholds that need to be considered. As an expert in this field, I understand the significance of agricultural income for the Indian economy and the complexities associated with its taxation. Based on my knowledge and experience, I can confidently state that agricultural income remains largely tax-free in India, providing much-needed support to the farming community.
This video contains the answer to your query
The video discusses the use of agricultural income and land as a means to evade taxes in India. According to the Income Tax Act, any income derived from agricultural land is tax-free, creating a loophole that allows individuals and companies to convert black money into white money. The video provides examples of politicians artificially boosting agricultural income through false transactions and individuals declaring non-cultivated land as agricultural to reduce tax liability. It also highlights how individuals can avoid capital gains tax by purchasing rural agricultural properties. The video emphasizes the need for caution in declaring agricultural income, as excessive amounts can draw scrutiny from the income tax department. Overall, it exposes the misuse of agricultural income and land to evade taxes and convert illicit funds into legal assets.
Other responses to your inquiry
As per section 10(1), agricultural income earned by the taxpayer in India is exempt from tax. Agricultural income is defined under section 2(1A) of the Income-tax Act.
Agricultural income earned by a taxpayer in India is exempt under Section 10 (1) of the Income Tax Act,1961. What is more shocking and surprising is that this so-called agricultural income is tax-free without any limit. You can have an unlimited amount of agricultural income without paying even a single rupee towards income tax.
By default, agricultural income is exempted from taxation and not included under total income. The Central Government can’t impose or levy tax on agricultural income. The exemption clause is mentioned under Section 10 (1) of the Income Tax Act of India. Central Government The Central Government can’t impose or levy tax on agricultural income.
No, only agriculture income from land situated in India is exempt from tax.
If you have Agricultural Income, you can still file for ITR, however as per section 10 (1), agricultural income earned by the taxpayer in India is exempt from tax.
Under Section 10 (1) of the ITA, 1961, agricultural income is exempt from taxation. This exemption implies that the Central Government does not impose or levy any tax on agricultural income. However, agricultural income tax persists at the state level.
Also, individuals are curious
Is agricultural income in India taxable for?
The answer is: Agriculture income is not taxed under any section of the Income Tax Act in India. As per Section 10(1) of the Income Tax Act, 1961, agriculture income is exempt from income tax. This means that if a person earns income solely from agricultural activities, they do not have to pay income tax on that income.
Correspondingly, Why agricultural income is not taxed in India?
Agricultural income is not taxable under Section 10 (1) of the Income Tax Act since it is not included in a person’s total income. However, if agricultural revenue surpasses Rs. 5,000 per year, the state government may levy a tax on it.
Is foreign agricultural income taxable in India?
Agricultural Income in India is Exempt from Income Tax u/s 10(1) of Income Tax Act, but agricultural income from outside India is taxable.
How much is agricultural income in India? Response will be:
| State/ Group of UTs | Average monthly income per agricultural household (₹) |
|---|---|
| West Bengal | 6,762 |
| Group of N E States | 16,863 |
| Group of UTs | 18,511 |
| All India | 10,218 |
How is agricultural income taxed in India? Under section 2 (1A) of the income tax act, income from agriculture is exempted by the central government of India, the State government must levy the tax on agriculture income. If the agriculture income is less then ₹ 5000 in the financial year is exempted. According to indiamoney.com – When is agricultural income taxed?
Also question is, Should agriculture be taxed?
Tax officials specifically recommended that the government think about taxing agricultural revenue, albeit only partially. People with agricultural income and regular income who earn more than a particular amount can be brought into the tax system.
Are farmers exempt from income tax in India? As an answer to this: Currently, farmers in India are exempted from paying income tax to the government. Is agricultural income fully exempt from tax? Under Section 10 (1) of the Income Tax Act, 1961, any income generated from any agricultural activities are exempted from being taxed by the Government.
Is agricultural income exempt from income tax in India?
Agricultural income earned by a taxpayer in India is exempt under Section 10 (1) of the Income Tax Act, 1961. Agricultural income is defined under section 2 (1A) of the Income-tax Act.
Also asked, Should agriculture be taxed? Answer will be: Tax officials specifically recommended that the government think about taxing agricultural revenue, albeit only partially. People with agricultural income and regular income who earn more than a particular amount can be brought into the tax system.
In this regard, What is the main source of agricultural income in India?
Answer will be: Section 2 (1A) of the Income Tax Act, 1961 considers three activities as the main source of agricultural income in India. These are: 1. Revenue or Rent Received from Let out Agricultural Land in India Rent is payable to the owner of the land in lieu of use by another individual as agricultural land.
Should political parties tax agricultural income in India?
Response to this: Every political party should keep in mind that the nation comes first, not simply vote politics if they truly wish to tax agricultural income in India. Currently, farmers in India are exempted from paying income tax to the government. However, if agricultural revenue surpasses Rs.5,000 per year, the state government may levy a tax on it.