Question

how to calculate agriculture income

Answer 1

In India, agricultural income refers to income earned or revenue derived from sources that include farming land, buildings on or identified with an agricultural land and commercial produce from a horticultural land. Agricultural income is defined under section 2(1A) of the Income Tax Act, 1961.
 
Steps to calculate the agriculture income.
STEP 1:

Add          agriculture income + non agriculture income.

STEP 2:

Compute tax on the aggregate income.

STEP 3:

Add the basic tax exemption limit for the relevant financial year FY 2016-17, to the net agricultural income.

STEP 4:

Calculate income tax on the aggregate amount which you have arrived at in STEP 3

You have to calculate income tax on the aggregate amount of INR 4.9 Lakhs shown in STEP 3.

STEP 5:

Deduct the amount calculated in STEP 4 from the amount calculated in STEP 2.


STEP 6:

You have to subtract the rebate you get under Section 87A.


STEP 7:

You have education cess at 2% and secondary and higher education cess at 1%. The total cess is 3%.