liable to income tax or not

[Dalia Felix]

Suppose a company engaged in farming are exporting their produces after grading, sorting, preserving and packing - will the income be subjected to Income Tax or is exempted as agricultural income.

[Mahir S]

Sir,

Tthe definition of agricultural income also includes -- Any income accruing to the person by the performance of any process to render the produce marketable.

Therefore if, in the ordinary course, a process is to be employed by the cultivator himself or the landlord who receives the produce as rent-in-kind, any income derived from such a process shall be agricultural income.

Hence, the process carried out in your case is also covered under definition of agricultural income, however as the process has been carried out a Company and not by the Cultivator/Landlord (as discussed in above para), therefore such activity shall not fall under agricultural income.

However, the views of various experts on the topic may also please be solicited.

[Mahir S]

Sir,

Please refer to you Personal messages on the issue.

Agricultural income is considered for rate purpose while computing tax of Individual/ HUF/AOP/ BOI/Artificial Judicial Person.

AI Summary

Agricultural income exclusion: processing by a company does not convert receipts into exempt agricultural income, so they are taxable.
Receipts from grading, sorting, preserving and packing qualify as agricultural income only when those marketability processes are performed by the cultivator or a landlord receiving produce as rent-in-kind; identical processes performed by a company do not fall within the definition and therefore are not agricultural income.