Published Jun 29, 2024
Agricultural income is money earned from farming activities. It comes from farming land, buildings used for farming, and products from gardens and orchards. This income is generated through growing crops and other farming operations.
Agricultural income includes rent from land, earnings from farming, income from buildings on farmland, rent from leasing land to cultivators, money from selling farm produce, and rent from farm warehouses.
Agricultural income is exempt from central tax under Section 10(1) of the ITA, 1961. However, states can tax it. If net agricultural income exceeds Rs. 5,000 and total income exceeds exemption limits, partial integration applies.
To calculate agricultural income tax, determine the tax on total income, then tax on agrarian income plus exemption limit. Subtract the second from the first, and add any rebates, surcharges, and cess for the final tax.
Report agricultural income in ITR 1 under the Agriculture Income column if it's under Rs 5,000. If it's more than Rs 5,000, use the form ITR-2 instead.
Yes, you can show agricultural loss in ITR. Taxpayers must report agricultural expenses in Schedule EI of ITR-3. They can also declare unabsorbed agrarian losses from the last eight years.