AGRICULTURE INCOME

[Sharad Aggarwal]

I HAVE BOUGHT MOUNTAIN LAND 15 ACRES..... AND HAVE PLANTED TREES LIKE SAFEDA, DARENK, ETC.... TWO GARDNERS HAVE ALSO BEEN APPOINTED FOR THE SAME ( FOR LOOK AFTER OF TREE AND FOR WATER THE PLANTS ) THE PLA PLEASE INFORM WHETHER INCOME AFTER CUTTING OF TREE.. WILL BE TAXABLE OR EXEMPTED ...... THANKS IN ADVANCE FOR PROMPT REPLY PLZ.

[CAGOPALJI AGRAWAL]

Please clarify whether you had bought the trees with land or these are new trees grown up by you.If these are planted by you then is it ag. income.

[DEV KUMAR KOTHARI]

From your query it is apparent that you have planted on the land and are carrying agricultural activities of cultivating the land. There wil be cutting to take crop and not to uptroot plant. In case the plant itslef is crop, then by cutting the plant crop is taken. Therefore, the crop- plant, branhces, flowers leaves or even roots will be agricultural produces cultivated by you. When land is cultivated, the sale of crop grown will be agricultural income, even if the trees were planted by vendor. In case of standing crop purchased with land (or some rights in land) also if the crop is purchased in half matured condition and the buyer carryout some operations of cultivating the land, the matured crop obtained will be agricultural produce and income derived from sale of it will be agricultural income.

[Raman garima]

Income will surely be exempted as it would be considered as agriculture income, it would be the part of growing of sapplings which is covered under agriculture income defination

AI Summary

Agricultural income: sale proceeds from trees planted and cultivated on land are treated as agricultural produce and exempt.
Proceeds from cutting and selling trees that the taxpayer planted and cultivated on land qualify as agricultural income; agricultural produce obtained by cutting (including branches, flowers, leaves or roots) is treated as agricultural income. Where standing or half-mature crops or saplings are acquired with land, if the buyer performs cultivation leading to maturation the resulting sale proceeds are likewise agricultural income.