Agriculture income is not exempt

This query is : Resolved

Guest

Guest (Querist)

23 February 2013 GOOD AFTERNOON TO ALL EXPERTS,
I WANT TO ASK YOU ABOUT CALCULATION OF AGRICULTURE TAX.
HARE IS AN EXAMPLE PLZ TOLD ME THAT THIS CALCULATION IS RIGHT OR WRONG.
An assesse has his total income of Rs.220000 and agricultural income is Rs.300000.We know tax rate upto 500000 is 10% and upto 800000 is 20%. Now total income for tax purpose is Total income + agricultural income = 220000+300000 = 520000.
Now compute tax on it according to the above tax rates. is Rs.34000.Now computation of agricultural income tax exemption. It would be computed on(basic exemption limit + agricultural income) = 200000 + 300000 = 500000.
. Now compute tax on it according to the above tax rates is Rs.30000

Now deduct the agricultural income tax exemption from the income tax on total computed = actual tax - agricultural tax exemption = 34000 - 30000 = 4000
4000*10.3/100=412
4000+412=4412

MY QUERY STARTED NOW.
WHAT WILL MY TOTAL TAX LIABLITY . SHOULD IT 4412 OR 2060(20000*10.3/100=2060)
in my opinion agriculture income is not tax free income . plz explain

CA.Sourabh Sethia

CA.Sourabh Sethia (Expert)
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23 February 2013 Agriculture income is partly exempt

because for the higher income people
it increases the slab rate for a person from 10% to 20% or 30%

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Guest

Guest (Querist)

23 February 2013 MEANS MY CALCULATION IS RIGHT NA

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Guest

Guest (Expert)

23 February 2013 TOTAL TAX LIABILITY WILL BE RS. 4,120/-

ONCE TOTAL INCOME EXCEEDS 10% EXEMPTION LIMIT, THEN AGRICULTURE INCOME WILL BE TAXED PARTIALLY.

CA.Sourabh Sethia

CA.Sourabh Sethia (Expert)
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23 February 2013 Yes Mr Ashish ji is right

it is Rs.4120
and Rs.2060

Nikhil Kaushik

Nikhil Kaushik (Expert)
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23 February 2013 The liability shall be Rs 4412 as computed by you.

the difference is the change in slab which results in some portion of agricultural income getting taxed.

Guest

Guest (Querist)

23 February 2013 thanks to all expert but tax will be 4412
or 4120

CA.Sourabh Sethia

CA.Sourabh Sethia (Expert)
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23 February 2013 it will be Rs.4120/-

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Guest

Guest (Querist)

23 February 2013 but sir how can you explain

CA.Sourabh Sethia

CA.Sourabh Sethia (Expert)
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23 February 2013 Income Tax Amount is Rs.4000/-

and education cess on the same is 3%

i.e 4000*3% = Rs.120

Therefore Total = Rs.4120/-

Nikhil Kaushik

Nikhil Kaushik (Expert)
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23 February 2013 Rajiv,

my mistake it shall be 3%

tax including agricultural income - Rs 34000

less - exemption - 30000

Tax payable Rs 4000

add cess at 3% = Rs 120

total tax liability Rs 4120

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Guest

Guest (Querist)

23 February 2013 YES SIR THANKS I WAS CALCULATE @10.3% IN 4000.I WAS WRONG . THANKS SIR

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Guest

Guest (Querist)

23 February 2013 THANKS VERY MUCH TO ALL EXPERT TO CLEAR MY DOUBT

Guest

Guest (Querist)

23 February 2013 BUT SIR IF AGRICULTURE INCOME IS LESS THAN 5000 THAN IT SHOULD BE NOT TAXABLE NA

CA.Sourabh Sethia