ADVOCATE VISHAL JOSHI

  Agricultural Income – Tax treatment / Taxability Introduction: Agricultural income earned by a taxpayer in India is exempt under Section 10(1) of the Income Tax Act, 1961. Agricultural income is defined under section 2(1A) of the Income-tax Act. As per section 2(1A), agricultural income generally means  (a) Any rent or revenue derived from land which is situated in India and is used for agricultural purposes. (b) Any income derived from such land by agriculture operations including processing of agricultural produce so as to render it fit for the market or sale of such products. (c) Any income is attributable to a farmhouse subject to satisfaction of certain conditions specified in this regard in section 2(1A). Any income derived from saplings or seedlings grown in a nursery shall be deemed to be agricultural income. Meaning of Agricultural Income: Section 2 (1A) of the Income Tax Act, 1961 defines “agricultural income” as an income under the following three sources: (i) Any rent or