13 May 2023
Under Section 10(1) of the Income Tax Act, 1961, any income generated from any agricultural activities are exempted from being taxed. Net agricultural income is declared in ITR. In ITR 1&4, agricultural income should be reported in the Agriculture Income column. However, ITR 1&4 must only be used if agricultural income is up to Rs.5,000. If the stated income goes over this limit, form ITR-2 or 3 must be filed. If a farmer's income is less than Rs.5,000 or if the total income minus the agricultural income is less than the basic exemption limit which is Rs.2.5 lakh for a person below the age of 60 years and Rs.3 lakh for an individual aged 60 years and above, then the income generated will be exempted from being taxed.
13 May 2023
1. Agricultural income is based on area of land, crop harvested, seeds purchase bills, revenue records, water & electricity facilities, sells bills etc. etc.. You have to authenticate the earnings based on these facts, though proper accounts may not have been maintained. 2. The agricultural income would not be taxed, but your slab rate of other income gets raised to its proportionate.
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