Agriculture & India’s Income Tax : Part 2 – Frequently Asked Questions ( FAQ )

If you have already read “Agriculture & India’s Income Tax : Part 1 – Meaning of “agricultural income” continue with this post.

Question: I am a Farmer / an agriculturist. Is my income taxable ?

Answer: As per section10(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. So, Agricultural income is not taxable. However, if you have non-agricultural income too, then while calculating tax on non-agricultural income, your agricultural income will be taken into account for rate purpose.

Question : Under the Income-tax Law is income from animal husbandry considered as an agricultural income ?

Answer : No

Question: What is income tax on Manufacture of Tea, Coffee and Rubber ?

Answer : Income derived from the sale of tea, coffee or rubbers grown and manufactured by the seller in India shall be computed as if it were income derived from business, and % as mentioned below of such income shall be deemed to be income liable to tax.

Tea : 40%, Rule – 8 – Income from the manufacture of tea
Coffee :  25%  Rule – 7B – Income from the manufacture of coffee
Rubber : 35% – Rule – 7A – Income from the manufacture of rubber

Question : What if Income which is partially agricultural and partially from business ?

Answer :  You can find the details in Rule 7 of Income Tax rules at website Link.