I have agricultural income of Rs. 5,00,000. this is my only income and i want to file income tax return. now i have following query.
1.whether produce arising from farm and used for self consumption (personal use or consumption for family members) are included in agri. income? if yes, at what value?
2. as per income tax act, income from produce arising from agricultural activities are calculated as if it is business income and all section applicable to business and profession are applicable to it. now my question is that-- depreciation on equipment used for agri. activities should be calculated at what rate?
3. Whether animal used for agricultural activity are considered as my assets ? if yes, what is depreciation rate? and if no, can i fully claim as allowable expense as and when i incurred it, while calculating net agricultural income?
02 September 2013
Yes you can file your return in ITR 4. The questions are replied as below:
1. Not material as it is to be deducted from your total income as drawings and no tax is payable and you can do it at cost to you.
2. Since the entire income is exemption in no way it is affecting you. Depreciation to be changed at the rate of 20% of WDV method which will decrease the value of the assets and cash will be generated and lower income will be reflected.
3.The animals are assets but no depreciation is allowable on purchase the cost is debited to either cows etc.and on death the same is written off. The newly born calf is 100% free of cost and therefore no depreciation provision is there in IT Act
i have one more query relating to this. some one told me that if you claim large amount of exemption,there is high risk of scrutiny assessment.on the other hand if i dont file return having only agriculture income and i made investment in some govt area exceeding some limit( i dont know exact limit) then there is also risk of scrutiny assessment.
now my question is to avoid this which book and documents i have to keep for purely agricultural income? and in which formate?
CAclubindia
