amul
This query is : Resolved
02 September 2010
Does the amul company pays income tax being an agricultural based company?
02 September 2010
yes, but being a co operative society avail a lot of deduction u/s 80P
02 September 2010
But why??since income from agricultural products is exempted from tax.isn't it?please give me a reason
14 July 2024
Amul (Amul Cooperative) is primarily known for its dairy products, which are agricultural in nature because they derive from milk produced by dairy cattle. However, the taxation of Amul or any other similar agricultural-based company depends on various factors related to the income they generate and how it is categorized under tax laws.
Here’s a breakdown:
1. **Nature of Income**: While Amul deals with agricultural products (milk and dairy), the exemption from income tax typically applies to income directly derived from agricultural operations such as farming, forestry, and the sale of agricultural produce.
2. **Business Operations**: Amul is not merely engaged in agricultural production (like farming crops or raising livestock), but it processes and sells dairy products. The income from processing and selling these products is considered business income rather than agricultural income.
3. **Taxation of Business Income**: Income from business activities, including processing and selling dairy products, is subject to income tax under the provisions of the Income Tax Act, 1961. Companies like Amul would be liable to pay income tax on the profits they earn from their business operations.
4. **Exemptions and Deductions**: While agricultural income is exempt from income tax, businesses like Amul can claim deductions and exemptions on their taxable income under various provisions of the Income Tax Act. These include deductions for expenses incurred in generating income, investments in certain sectors, and other permissible deductions.
In summary, Amul pays income tax because its income is classified under business income, derived from processing and selling dairy products, rather than agricultural income exempted from tax. The exemption from income tax specifically applies to income directly related to agricultural operations as defined under tax laws.
Here’s a breakdown:
1. **Nature of Income**: While Amul deals with agricultural products (milk and dairy), the exemption from income tax typically applies to income directly derived from agricultural operations such as farming, forestry, and the sale of agricultural produce.
2. **Business Operations**: Amul is not merely engaged in agricultural production (like farming crops or raising livestock), but it processes and sells dairy products. The income from processing and selling these products is considered business income rather than agricultural income.
3. **Taxation of Business Income**: Income from business activities, including processing and selling dairy products, is subject to income tax under the provisions of the Income Tax Act, 1961. Companies like Amul would be liable to pay income tax on the profits they earn from their business operations.
4. **Exemptions and Deductions**: While agricultural income is exempt from income tax, businesses like Amul can claim deductions and exemptions on their taxable income under various provisions of the Income Tax Act. These include deductions for expenses incurred in generating income, investments in certain sectors, and other permissible deductions.
In summary, Amul pays income tax because its income is classified under business income, derived from processing and selling dairy products, rather than agricultural income exempted from tax. The exemption from income tax specifically applies to income directly related to agricultural operations as defined under tax laws.
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