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Tax on agri income

Shalaka Chawla (-) (60 Points)

08 August 2011

this is the 2nd time i am asking...:(,,,,when computing tax liab in case of both agri and non-agri income...we add max exemption limit to agri income....WHY??????? please help!!!

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5 Replies

Devendra (Chartered Accountant) (4775 Points)
Replied 08 August 2011

There is a different method to calculate the Income Tax liability,if the Agricultural income is beyond Rs. 5000 and the Total Non-Agricultural income is above the basic exemption limit. The rebate is to be calculated and is deducted from the normally calculated Income Tax liabiilty. But is necessary that the above two conditions shall be satisgied to calculate the Rebate. This method is known as Partial Integration.

Regards,
Devendra K

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PRAMOD PANDIT M.COM , CA FINAL (PROFESSIONAL SERVICES) (207 Points)
Replied 08 August 2011

It is indirect way to tax exempt agri income this prescribed in i.t.act.

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 08 August 2011

Originally posted by : Devendra
	There is a different method to calculate the Income Tax liability,if the Agricultural income is beyond Rs. 5000 and the Total Non-Agricultural income is above the basic exemption limit. The rebate is to be calculated and is deducted from the normally calculated Income Tax liabiilty. But is necessary that the above two conditions shall be satisgied to calculate the Rebate. This method is known as Partial Integration. Regards, Devendra K

AGREED

(Guest)

On the basis of the recommendation of the K.N.Raj Committee, Government of India has implemented the policy of “partial integration” of agricultural and nonagricultural income in 1973 . Although agricultural income is exempt income u/s 10(1)of the act , it is added to non-agricultural income for tax computation when non-agricultural income is higher than the exemption limit and agricultural income exceeds5000. Such integration is not applicable to companies, firms, local authorities or cooperative societies. This means that the marginal income tax rate is determined on the combined income of an assessee, but the rate is only applied to the non-agricultural tax base.