Agricultural income in Bangladesh can be derived from the cultivation of land and use of buildings for agricultural purposes. It includes income from crops, granting land rights to others, and certain percentages of income from tea, rubber and other gardens processing agricultural goods. Expenses like land taxes, production costs, depreciation and interest are deductible from agricultural income. Certain income amounts are fully or partially exempt for indigenous hillmen or when agriculture is the only source of income. The computation of net agricultural income involves deducting all allowable expenses from the gross income derived from agricultural activities and assets.

1. Income from Agriculture
Agriculture refers to to the production of goods through the
growing of plants, animals and other life forms.
It also refers to field cultivation or cultivation of the ground,
which involves a combination of both basic and subsequent
operation
Crops or tress of spontaneous growth in forests or any other
places where there is no human effort is not considered as
agriculture.

2. Scope of
Income from Agriculture
“Any income derived from any land in Bangladesh and used for agriculture
purposes:
(i)by means of agriculture
(ii)by the performance of any process ordinarily employed by a cultivator to render
marketable the produce of the agricultural land
(iii)by the sale of the agricultural produce of the land raised by the cultivator in
respect of which no process, other than that to render the produce marketable, has
been performed
(iv)by granting a right to any person to use the land for any period
Any income derived from any building which--
(i) is occupied by the cultivator of any such land in Bangladesh and used for
agriculture purposes in which any process is carried on to render marketable any
such produce as aforesaid;
(ii) is on, or in the immediate vicinity of such land; and
(iii) is required by the cultivator as the dwelling house or store-house or other out-
house by reason of his connection with such land.

3. Scope of
Income from Agriculture
Deemed agricultural income:
Revenue gain on sale/disposal of agricultural assets u/s 19(17), not exceeding
the difference between cost and WDV (written down value)
Compensation/insurance recovery for discarding/destruction/ destroying of
agricultural assets u/s 19(19), not exceeding [cost less WDV less salvage value]
Partially agricultural income: Rules 30, 31 & 32
Income from tea (Rule 31): 60% income is agricultural
Income from rubber (Rule 32): 60% income is agricultural
Income from agricultural produce other than tea or rubber (Rule 30): agricultural
income equals to “cost of agricultural raw materials used” contained in the “cost
of goods sold”

4. Summery of partly agricultural income
Nature of partly
agriculture income
To be considered
as agriculture
income
To be consideres
as income from
business and
prorsseion
Refernece
Income from tea
garden
60% 40% Sec 26 (2) and rule
31
Income from
Rubber garden
60% 40% Sec 26 (3) and rule
32
Income from
tobacco/sugar/
other similar
products
60% if further
processing is done
by assesse
100% if further
processing is not
done
40% if further
processing is done
by assesse
NOTHING if
further processing
is not done
Sec 26 (3) and rule
32

5. Admissible expense (sec: 27)
•Land development tax or rent [sec. 27(1)(a)]
•Tax, local rate or cess (other than income tax) [sec. 27(1)(b)]
•Cost of production [sec. 27(1)(c)]:
•Actual cost, if books of accounts maintained properly, on
•cultivation cost of land and livestock-raising,
•ordinary processing cost
•transportation cost, and
•repair and maintenance cost
•60% of the market value of the produce, if books of accounts are not
maintained properly
•Zero, if sharecropping (adhi, barga, or bhag)
•
•Insurance premium [sec. 27(1)(d)]
•Maintenance of irrigation or protective work [sec. 27(1)(e)]

6. Admissible expense (sec: 27)
•Depreciation on agricultural assets as per Third Schedule [sec. 27(1)(f)]
•Mortgage or other capital charge [sec. 27(1)(g)]
•Interest on borrowed capital [sec. 27(1)(h)]
•Revenue loss on discarding/destruction/destroying to agricultural
assets [sec. 27(1)(i); see also sec. 19(19)]
•Revenue loss on sale/disposal of agricultural assets [sec. 27(1)(j); see
also sec. 19(17)]
Depreciation on agricultural assets as per Third Schedule [sec. 27(1)(f)]
•Paragraph 1, Third Schedule
•Depreciation Allowance on Assets used for Agricultural Purposes
•Depreciation method: Written down value (WDV) method with
prescribed rate
•WDV for the first year is ‘cost’.
•Year of acquisition: Depreciation rate is to be applied on ‘cost’
•Year of sale: No depreciation is allowed.

7. Non Assessable Agricultural Income
Para-27: Income of an individual, being an
indigenous Hillman of any of the hill districts of
Rangamati, Bandarban and Khagrachari,
derived from economic activities within the hill
districts
Para-29: “Agricultural income” up to Taka
50,000 when only source of income is
agriculture
Para-45: An amount equal to fifty percent of
the income of an assessee derived from the
production of corn/maize or sugar beet;

8. Computation of agricultural income at a glance
Description TK TK
Income from agriculture (sec 26&27)
Sale of crops
Income from any land or building uded for agriculture purpose
Income from granting a right( Borga/ adhi/bhag)
Income from tea/rubber/other garden
Revenue profit by sale of discarded or demolished agricultural machineries
Other income relating agriculture( sale of palm, juice,rearing of cattle)
Less: Admissiable expenses
Land development tax or rent [sec. 27(1)(a)]
Tax, local rate or cess (other than income tax) [sec. 27(1)(b)]
Cost of production [sec. 27(1)(c)]:
Actual cost, if books of accounts maintained properly, on
cultivation cost of land and livestock-raising,
ordinary processing cost
transportation cost, and
repair and maintenance cost
60% of the market value of the produce, if books of accounts are not maintained properly
Zero, if sharecropping (adhi, barga, or bhag)
Insurance premium [sec. 27(1)(d)]
Maintenance of irrigation or protective work [sec. 27(1)(e)]
Depreciation on agricultural assets as per Third Schedule [sec. 27(1)(f)]
Mortgage or other capital charge [sec. 27(1)(g)]
Interest on borrowed capital [sec. 27(1)(h)]
Revenue loss on discarding/destruction/destroying to agricultural assets [sec. 27(1)(i); see also sec. 19(19)]
Revenue loss on sale/disposal of agricultural assets [sec. 27(1)(j); see also sec. 19(17)]
Other revenue expenses