Tax on Agricultural Income in India | Calculation

Agricultural Income is not Taxable in India. However, a method has been laid down to levy tax on agricultural income in an indirect way. This concept is known as partial integration of taxes. It is applicable to individuals, HUF, unregistered firms, AOP, BOI and artificial persons. Two conditions which need to satisfied for partial integration are:

1. The net agricultural income should exceed Rs. 5,000 p.a., and

2. Non-agricultural income should exceed the maximum amount not chargeable to tax.

Computation of Tax on Agricultural Income In India

Step 1: Add non-agricultural income with net agricultural income.

Step 2: Compute Tax on Step 1 (not including Cess)

Step 3: Add net agricultural income and the maximum exemption limit available to the assessee.

Step 4: Compute tax on Step 3. (not including Cess)

Step 5: Compute Net Tax Payable ( Step 2 – Step 4)

Step 6: The sum so arrived at shall be increased by education cess @2% and secondary and higher education cess @1%.

Tax on Agricultural Income Calculator

We have attached below a Tax on Agricultural Income Calculator coded on excel.

agriincome

You can download the calculator from below.

21 Comments Tax on Agricultural Income in India | Calculation

  1. Anoj Agarwala

    Sir,
    I am a partner in a construction firm and want to start a agri business. Whether ind, firm or co gets 100% EXEMPTION on taxes. Shall i start as ind or open a partnership firm or a co.

    Reply
  2. Anoj Agarwala

    Sir,
    Presently I am a partner in a construction firm . I want to start another venture of agriculture business. What method (Ind, firm or company) gives me 100% exemption on income tax. In short i want to avail the benefit of tax exemption on agri income.

    Reply
  3. Anoj Kumar Agarwala

    Sir,
    I have a business income and agricultural income and want to get some clarifications about agricultural income.
    Please Contact: 09823466766

    Reply
  4. manzoor

    I windup my non agricultural business Due to some losses now I have only agricultural income is it necessary for me to file IT return

    Reply
  5. manzoor

    I windup my non agricultural business due to some losses also having agricultural income about 120000 per annum, already submitting my IT return from last 3 year’s is it necessary for me to file IT return for next financial year

    Reply

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