Agriculture Income Tax – Every thing you need to know – with Calculator

Agriculture Income Tax is often neglected in India, even by people having good income from it, thanks to ignorance and  misbeliefs. Agriculture income in India is exempted from income tax under certain conditions, under section 10 (1) of Income Tax act. This does not mean that you need not pay tax on your agriculture income. As a matter of fact, agriculture income is also taxable on certain conditions.

What is  an Agriculture Income.

Agriculture Income has been clearly defined under section 2(1)A of Income Tax act. Your Income can be considered as Agriculture Income if it satisfies following conditions.

  • Revenue generated through rent or lease of a land (in India) that is used for agriculture purposes.
  • Income generated by commercial sale of a produce gained from an agriculture land.
  • Revenue generated through the renting or leasing of buildings in and around agriculture land.
Exclusions from Agriculture income
  • Revenue from sale of processed agriculture produce without actual agricultural activity
  • Income from trees sold as timber
  • Revenue from extremely processed produce
Agriculture Income Tax – When you need to pay it.

Tax on Agricultural income is to be paid if following two conditions are satisfied cumulatively.

  1. Net Agricultural income exceeds Rs.5000 and
  2. Total income, excluding net Agricultural income exceeds the basic exemption limit.
Agriculture Income Tax – How to calculate?
Agriculture income tax online calculator

If Agricultural Income=(A) and Other Income = (B). Then Compute Tax on (A)+(B). Let tax thus computed  is (T1)

agriculture income tax calculation step 2

Let the Basic Exemption slab for income tax payment is (E) and Agricultural income (A). Compute Tax on (A)+(E). Let tax thus computed is (T2)

Agriculture Income Tax online calculation step 3

Actual Income Tax liability will be (T1-T2)
Thus the formula for computing Agricultural Income Tax is IT=T(A+B)-T(S+A)

Agriculture Income Tax – Online Calculator

If you feel that this calculation is complex, you can use the Agriculture Income Tax – online calculator to calculate your Income Tax  liability on your agriculture income.

You can calculate your complete Income tax liability  with detailed calculations using Detailed Income Tax Calculator (without Agriculture Income.)

Read more: Income tax returns e-filing made simple – a step by step guide

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Anish L J

Anish L J is a finance, insurance and software consultant with more than 18 years of experience in these fields. He thoroughly follows developments in insurance and finance. 'INSURANCE FUNDA' (www.insurancefunda.in) is his endeavour to provide simple and solid solutions in the Insurance and Finance sectors.
Follow me

Anish L J

Anish L J is a finance, insurance and software consultant with more than 18 years of experience in these fields. He thoroughly follows developments in insurance and finance. 'INSURANCE FUNDA' (www.insurancefunda.in) is his endeavour to provide simple and solid solutions in the Insurance and Finance sectors.

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