When agriculture income is taxable?

[ramesh bohra]

agriculture income if we have agri. land and we growing crops and sell as following way then income is exempted or not 1. we sell agri. crop in indian market 2 we export agri crop in same raw stage 3 we process some chemical for preserve crop we export it it will exmpt or not 4 we have crop and we make juice and then export it then what will happen

[Surender Gupta]

Making Juice or processing the crop otherwise alterer the nature of agriculture produce. Sale of product after processing is resulting into profit (or loss) from agriculture as well as business activity. For this purpose you may refer to rule 7, 7A, 7B or 8 of the Income Tax Rules, 1962. Export of the goods obtained after processing of crop or sale in domestic market is irrelevant for the purpose of determining the nature of income.

[DEV KUMAR KOTHARI]

I agree with reply of Mr. Surendra Gupta. In hands of land onwer agricultural income,a s defined in IT ACT will be exempt. In agricultural produce is sold after applying minimum processes which are required to renderr theproduce to be taken to market, it will result into agricultural income. In case more processes are applied then agricultural and business income will have to be determined as per applicable Rules. Depending on situation of factory, products and processes employed, time of installation of facilities etc. there may be some relief applicable under Chapter III and VIA which need to be checked. Check, whether there is any agricultural income tax in the state where agricultural land is situated.Agricultural income tax is imposed by the State Government. For detailed discussion better you consult your tax consultants.

AI Summary

Understanding Taxability of Agricultural Income: Domestic Sales, Exports, and Processing Under Income Tax Rules 7, 7A, 7B, 8. A forum user inquired about the taxability of agricultural income, specifically when crops are sold domestically, exported in raw form, processed for preservation, or turned into juice for export. A respondent clarified that processing alters the nature of agricultural produce, potentially resulting in business income, as per Income Tax Rules 7, 7A, 7B, or 8. Another contributor agreed, noting that minimal processing for market readiness results in agricultural income, while extensive processing involves both agricultural and business income. They advised consulting tax consultants and checking state-specific agricultural income tax regulations.