Explain about taxable incomes exempted incomes rebatable incomes agricultural incomes kinds determination party agricultural and partly businesses income tax treatment
Answers
Answer:
As per Section 10(1) of the Income Tax Act, 1961, agricultural income is exempted from taxation. ... Total income, excluding net agricultural income, surpasses the basic exemption limit (Rs. 2,50,000 for individuals below 60 years of age and Rs. 3,00,000 for individuals above 60 years of age).
Answer:
As per Section 10(1) of the Income Tax Act, 1961, agricultural income is exempted from taxation. The central government cannot levy tax on the agricultural income received. However, agricultural income is considered for rate purposes while assessing the income tax liability if the following two conditions are met:
Net agricultural income is greater than Rs. 5,000/- for previous year.
Total income, excluding net agricultural income, surpasses the basic exemption limit (Rs. 2,50,000 for individuals below 60 years of age and Rs. 3,00,000 for individuals above 60 years of age).
If these two conditions are met, tax liability shall be computed in the following manner:
Step 1: Let us regard agricultural income as X and other income as Y Tax computed on X+Y is B1
Step 2: Let us regard basic exemption slab for income tax payment as A Tax computed on A+X is B2
Step 3: The actual income tax liability shall be B1-B2
Note: If the individual’s aggregate agricultural income is up to Rs. 5,000, the individual will have to disclose the agricultural income in the income tax return (ITR). In case the agricultural income crosses Rs. 5,000, the individual will have to disclose the agricultural income in ITR 2.
Section 54B of the Income Tax Act, 1961