This document discusses agricultural income as defined in the Indian Income Tax Act of 1961. It defines agricultural income as income derived from agricultural sources in India. It exempts agricultural income from taxation under section 10(1) of the Act. The document outlines the various types of agricultural income, including income from cultivation, agricultural processes, sale of produce, and renting agricultural property. It also discusses the tests to determine what qualifies as agricultural income and provides examples of agricultural and non-agricultural incomes. The document concludes with an explanation of how agricultural income is integrated with non-agricultural income for taxation purposes when thresholds are exceeded.

1.  B.SATYANARAYANA RAO
ASSO.PROF IN COMMERCE
ST.JOSEPH’S DEGREE & P.G COLLEGE
PPT
ON
AGRICULTURAL INCOME
IN INDIAN INCOME TAX ACT 1961

2. MEANING: The Income which received
from Agriculture source is called
Agricultural Income.

3. Definition U/S 2(IA)
 Agricultural Income Is Fully Exempted as per
Income Tax Act 1961 U/S 10(1)
Agricultural Income includes the following
(a).Any Rent or Revenue derived from
Agricultural Land situated in India

4. (b) Any Income From
(i) Cultivation of Agricultural Land
(ii) a process carried on to make the
produce or rent in kind marketable.
(iii) From sale of Agricultural produce

5. (c) Income From Agricultural House
Property

6. TYPES OF AGRICULTURAL INCOME
1. RENT OR REVENUE
2. CULTIVATION OF LAND
3. INCOME FROM A PROCESS
4. INCOME FROM SALE OF PRODUCE
5. INCOME FROM LET OUT
AGRICULTURAL H OUSE PROPERTY

7. TESTS TO DETERMINE AGRI INCOME
 INCOME IS DERIVED FROM LAND

8. LAND MUST BE USED FOR
AGRICULTUR PURPOSE

9. LAND MUST BE SITUATED IN INDIA

10. Agricultural Incomes
 (a) Income from sale of replanted trees.
 (b) Rent received for agricultural land.
 (c) Income from growing flowers and creepers.
 (d) Share of profit of a partner from a firm
engaged in agricultural operations.
 (e) Interest on capital received by a partner from
 a firm engaged in agricultural operations.
 (f) Income derived from sale of seeds.

11. Non Agricultural Incomes
 (a) Income from poultry farming.
 (b) Income from bee hiving.
 (c) Income from sale of spontaneously
grown trees.
 (d) Income from dairy farming.
 (e) Purchase of standing crop.
 (f) Dividend paid by a company out of its
agriculture income.

12.  (g) Income of salt produced by flooding
The land with sea water.
(h) Royalty income from mines.
(i) Income from butter and cheese
making.
(j) Receipts from TV serial shooting in
farm house is not agriculture income.

13. Integration of Agricultural Income
Meaning: Clubbing of Agricultural
Income with Non Agricultural
Income for the Computation of Tax
Liability is known as Integration
of Agricultural income.

14. When to Integrate
If Agricultural Income exceeds Rs.5000
in the relevant Previous year
If Non Agricultural Income Exceeds
Basic Exemption Limits of
Rs.2,00,000/2,50,000/5,00,000 in the
relevant Previous year

15. How to Integrate
Step 1 : Add A.I with N.A.I
Step 2 : Calculate Tax on the (Step
1) total as per the current Tax Rates
Step 3 : Add A.I with Basic
exempted limit

16. Step 4 : Calculate Tax on the (Step 3)
total as per the current Tax Rates
 Step 5 : Tax calculated at step 4 is
deducted from tax calculated at step 2
Step 6 : Add Education Cess 3%
 Step 7 : Total is tax payable.

17. THANK YOU