Tax Treatment of Agricultural Income Under Income Tax Law (As Amended by Finance Act, 2024)

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Description
Agriculture plays a vital role in Indian economy. Except for two short periods of nine years in all (1860-1865 and 1869-1873) agricultural incomes have been exempt from the general income-tax. In 1925, the Indian Taxation Inquiry Committee observed that there is no historical or theoretical justification for the continued exemption from the income-tax of incomes derived from agriculture. They found it justified to include agriculture income for rate purposes. It continues unchanged till date. Section 2(1A) of the Income Tax Act, defines "agriculture income". But some incomes are derived partly from agricultural and partly from non-agricultural operations. Also it is difficult to define agricultural operations. Hence a detailed analysis has been given to define taxability of such income under the Income Tax Act. Tax on agricultural income falls under the 'State list', meaning that only State Governments can levy income-tax on such incomes, not the Central Government. There is no clause for directly taxing agricultural income. According to Section 10(1) of the Income Tax Act, agricultural income is not  considered a means of income. Income generated from agriculture is exempted from taxation by the Central Government. However, there is an indirect method of taxing that is levied on agricultural income.
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Table of Contents
Chapter 1 : Introduction
Chapter 2 : Background of Agricultural Income -Tax
Chapter 3 : Legal Position of Tax on Agriculture
Chapter 4 : Meaning of Agricultural Income
Chapter 5 : Tests to Determine Agricultural Income
Chapter 6 : Types of Agricultural Income
Chapter 7 : Taxability of income from nursery growing and selling Flowers, Flowers Plants
Chapter 8 : Exemptions-not Agricultural Income
Chapter 9 : Capital Asset - Agricultural Land
Chapter 10: Sale of Agricultural Land - Held not Assessable as Capital Gain
Chapter 11. Sale of Agriculture Land - Held Assessable as Capital Gains
Chapter 12. Exemption of Agriculture Income
Chapter 13: Exemption of Capital Gains & Interest Arising from the Transfer of Agricultural Land
Chapter 14 : Capital Gain Tax on Sale of Urban Agricultural Land
Chapter 15: Exemption from Capital Gains from Transfer of Agricultural Land
Chapter 16 : Rules for Computation of Net Agricultural & Income
Chapter 17 : Treatment of Party Agricultural & Party Non-Agricultural Income
Chapter 18 : Income from Growing and Manufacturing Rubber
Chapter 19 : Income from the Manufacture of Coffee
Chapter 20 : Income from the Manufacture of Tea
Chapter 21 : Impact of of Agricultural Income on Tax Computation
Chapter 22 : Assessment relating to Agricultural Income
Chapter 23 :Deductible Agricultural Expenses
Chapter 24 : Agricultural Income-Addition Made Held to be Justified
Chapter 25 : Agricultural Income-Addition Made Held to be not Justified
Chapter 26 : Treatment of Cash Sales of Agricultural Prduce
Chapter 27 : Treatment of Set-off and Carried forward of Losess from Agricultural Activity
Chapter 28: Applicability of Section 14A read with Rule 8D to Agricultural Income
Chapter 29: Adjustment from Book Profits in the Computation as Provided in Section 115JB
Chapter 30: Cases where Revision of Order under Section 263 Held to be Justified
Chapter 31 : Cases where Revision of order under Sec. 263 held to be  Justified
Chapter 32 : Cases where Reassessment was held to be  Justified
Chapter 33 : Cases where Reassessment held to be not Justified
Chapter 34 : Cases where Income held to be as Agricultural Income
Chapter 35 : Cases where Income held to be Non-Agricultural Income
Chapter 36 : Cases where Income Shown as Agricultural Income held as income from Business
Chapter 37 : Cases where Income Shown as Agricultural Income held as Income other Sources
Chapter 38 : Matter set Aside to the Assessing Officer for Verification
Chapter 39 : Levy of Penalty
Chapter 40 : Land & Revenue Records - Terms used in India
Chapter 41 : Important Forms
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Author Details
Ram Dutt Sharma, got his post-graduation (M.Sc.) from M.D. University, Rohtak in 1980. He joined the Income-tax Department in the year 1983 and presently working as Income Tax Officer in Faridabad. He worked at various stations of North-West Region of Income Tax Department. He has wide experience of all wings of Income Tax Department such as assessment unit, Special Range, TDS Wing, Investigation Wing, Intelligence and Criminal Investigation etc. He has been contributing articles and addressing on topics relating to Income Tax at Direct Tax, Regional Training Institute, Chandigarh. He has also addressed number of seminars organized by the Income-tax Department, Chartered Accountants, Advocates and various Trade Associations. He is the author of number of books on direct taxes, namely Computation of income from salary under income tax law with tax planning, Computation of income from house property, Formation and Management of Charitable and Religious Trust, Educational and Medical Institutions under income-tax law, Taxation of Non-Resident Indians under income-tax law etc. which have been highly appreciated by the readers.