income should be charged in other source

no deduction can ce claimed on it (30 )

Agricultural operation means that efforts have been induced for the crop to sprout out of the land. The ambit of agricultural income also covers income from agricultural operations, which includes processing of agricultural produce to make it fit for sale. Like the people who receive passive agricultural income in the form of rent or revenue, the people who actually carry out agricultural operations are also eligible for tax-free agricultural incom.

Hence when the part of the land is letout Income derived from it cannot be treated as agricultural income unless the letout land is used for agricultural purpose.

FOR AGRICULTURAL INCOME IT SHOULD SATISFY THE CONDITIONS MENTIONED IN ACT...SO IT IS TREATED AS INCOME FROM OTHER SOURCES..!!

Originally posted by : Arun Kumar
	Friends, I have a question for all those persons who gave clarification on this subject. If the land is of 10 acres which is fully used for agricultural purposes and just around 5cents is letout for Reliance telecom then why cant this be treated as agricultural income. since the definition just says that Land should be used for agricultural purpose it doesnt put a restriction saying it should be used in full for agricultural purposes. Why cant partial use for agricultural purposes satisfy the condition laid out u/s 2(1A)  Pls reply.

Hi Arun, to qualify as agricultural income, rent should be derived from the land used for agicultural purpose. It has to be occuppied by the cultivator or receiver of rent, and should be used as an outhouse, storehouse or dwelling house to qualify as agri income eligible exemption.

In the case you said, the rent from RCom has to be offered as IFOS (actually, as per the circumstances)

You may refer

B Nagi Reddy Vs CIT [2002] 125 TAXMAN 20 (MAD.)

Section 2(1A) of the Income-tax Act, 1961 - Agricultural income - Assessment years 1980-81 to 1982-83 - Assessee earned income by permitting film producers to shoot their films in his garden - Whether shooting of films is an activity which has absolutely  no nexus with agricultural operation or with land excepting that shooting is done on land which may be or has been an agricultural land yielding some agricultural income - Held, yes - Whether, therefore, income earned by assessee was not agricultural income, but it was business income - Held, yes

https://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2009ITAct/[2002]125Taxman0020(Mad).htm

NCOME FROM OTHER SOUCES BECAUSE IN ORDER TO TREAT RENT AS AGRICULTURAL INCOME, IT MUST HAVE TO SATISFY ALL THE CONDITIONS METIONED UNDER SEC 2(1A) OF IT ACT. ONE OF THE CONDITION SPECIIFIES THAT THE LAND MUST HAVE TO BE USED FOR AGRICULTURAL PURPOSE. SINCE IN THE GIVEN CASE, LAND IS RENTED OUT TO RELIANCE FOR CONSTRUCTING TELEPHONE TOWER, IT IS TAXABLE UNDER THE HEAD INCOME FROM OTHER SOURCES.

ACTUALLY IT IS TO BE TREATED AS INCOME FROM OTHER SOURCES PLEASE REFER THE AMENDMENT MADE BY FINANCE ACT 2008 IN THIS BEHALF AND SOME CASE LAWS HAVE ALSO BEEN DECIDED WHICH YOU COULD SEE SUCH AS

The Madras

High Court in the case of B. Nagi Reddi v. CIT (2002) 258 ITR 719, following the judgment of

Apex Court in the case of     Raja Benoy Kumar Sahas Roy (1957) 32 ITR 466

Does not constitute agricultural income, as it does not come from agricultural activity. it is Income from other sources

EVEN IF LAND IS AGRICULTURE BUT USED FOR COMMERCIAL PURPOSE SO IOS

agreed with above

charged in ios

Hi Friends,

Thanks a lot for your replies, Charging the Income from lettiing out to Reliance under Income from other sources is an obvoius answer. We should appreciate the fact that the Original question is being asked by a CA final student (Yogesh Shah) so it is quiet obvious that he also would have came across all the clarifications which you have given. When we look him as our client we can find ways to treat it as agricultural income, the Section 2(1A) reads as follows;

"  ⁶“agricultural income”⁷ means⁸—

   ⁹[(a)  any rent¹⁰ or revenue¹⁰ derived¹⁰ from land¹⁰ which is situated in India and is used for agricultural purposes;]

      (b)  any income derived from such land¹⁰ by—

       (i)  agriculture¹⁰; or

      (ii)  the performance by a cultivator or receiver of rent-in-kind of any process ordinarily employed by a cultivator or receiver of rent-in-kind to render the produce raised or received by him fit to be taken to market¹⁰; or

     (iii)  the sale by a cultivator or receiver of rent-in-kind of the produce raised or received by him, in respect of which no process has been performed other than a process of the nature described in paragraph (ii) of this sub-clause ;

      (c)  any income derived from any building owned and occupied by the receiver of the rent or revenue of any such land, or occupied by the cultivator or the receiver of rent-in-kind, of any land with respect to which, or the produce of which, any process mentioned in paragraphs (ii) and (iii) of sub-clause (b) is carried on :.................."

Our case comes under Clause (a) of Section 2(1A) which says

(a) any rent or revenue derived from land which is situated in India and is used for agricultural purposes;

IT IS NOT

(b) any rent or revenue derived from land on letting out for agricultural purpose

There is a subtle difference between the above two sentences. All the replies given by you exactly goes in line with the 2nd line("b" above) . Though not with the  1st line ("a" above) since the Land used for agricultural purposes also implies partial use. The act doesnt put a restriction saying that it should be used in entirety for agricultural purpose. I feel there is an arguable loop available in this sub-clause which is not clarified even by the explanation provided under the section for clause (c) which is as follows;

"For the removal of doubts, it is hereby declared that income derived from any building or land referred to in sub-clause (c) arising from the use of such building or land for any purpose (including letting for residential purpose or for the purpose of any business or profession) other than agriculture falling under sub-clause (a) or sub-clause (b) shall not be agricultural income"

This Income cannot be compared with letting out the cultivated land for shooting since it is an separate activity altogether but letting for Reliance tower is not an activity so there is no requirement to argue whether letting out for Reliance tower is agricultural activity since it cannot be considered as an activity perse.

So I feel that lncome from letting can be claimed as exempt under Section 2(1A)(a)

Pls correct if I am wrong.........