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.
You can download the calculator from below.