Question

Write a short note on the income which is connected with land but is not agriculture income

Answer 1

Agricultural income [2(1A)] has not been taxed right from the beginning under the Income-tax Act. The justification for such exemption is that income from agriculture is taxed in the form of land revenue. Another reason for its being kept outside the purview of the In­come-tax Act, 1961, is that agriculture being a State subject, the Central Government is not entitled to tax this source of income. The State Governments are of course, free to tax this source. A few of them are, in fact, doing so. The position under the Income-tax Act is that section 10(1) exempts agricultural income from income-tax. Because of the exemption it enjoys, it is necessary to clearly understand the definition of the term ‘Agricultural Income’. In the exact sense, ‘Agricultural Income’ as defined u/s 2(1A) includes the various types of incomes.

Answer 2

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⎇ The justification for such exemption is that income from agriculture is taxed in the form of land revenue. Another reason for its being kept outside the purview of the In­come-tax Act, 1961, is that agriculture being a State subject, the Central Government is not entitled to tax this source of income. The State Governments are of course, free to tax this source. A few of them are, in fact, doing so.