- Agricultural income earned from agricultural operations or rent from agricultural land is exempt from income tax under the Indian Income Tax Act. This is because the constitution gives power to tax agricultural income to state legislatures, not central government. - Agricultural income includes income from agricultural produce, rent from agricultural land, and income from a farmhouse situated on or near the agricultural land. Income from nursery operations is also considered agricultural income. - The assessment year is the year following the financial year and is used for filing tax returns for income earned in the previous financial year. For example, income earned between April 1, 2013 to March 31, 2014 is filed under assessment year 2014-15.