Agricultural income earned by a taxpayer in India is exempt under Section 10(1) of the Income Tax Act, 1961. Agricultural income is defined under section 2(1A) of the Income-tax Act.

As per section 2(1A), agricultural income generally means  (a) Any rent or revenue derived from land which is situated in India and is used for agricultural purposes. (b) Any income derived from such land by agriculture operations including processing of agricultural produce so as to render it fit for the market or sale of such produce. (c) Any income attributable to a farm house subject to satisfaction of certain conditions specified in this regard in section 2(1A). Any income derived from saplings or seedlings grown in a nursery shall be deemed to be agricultural income.

Meaning of Agricultural Income:

Section 2 (1A) of the Income Tax Act, 1961 defines “agricultural income” as an income under the following three sources:

(i) Any rent or revenue derived from land which is situated in India and is used for agricultural purposes: The assessee will not be liable to pay tax on the rent or revenue arising from agricultural land subject to the conditions:

(a) The land should either be assessed to land revenue in India or be subject to a local rate assessed and collected by officers of the Government.

(b) In instances where such a land revenue is not assessed or not subject to local rate, the land should not be situated within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee or by any other name) or a cantonment board, and which has a population of more than ten thousand (according to the last preceding census which has been published before the first day of the previous year in which the sale of land takes place); or it should not be situated:

  • more than 2kms. from the local limits of any municipality or cantonment board and which has a population of more than 10,000 but not exceeding 1,00,000; or
  • not being more than 6kms. from the local limits of any municipality or cantonment board and which has a population of more than 1,00,000 but not exceeding 10,00,000; or
  • not being more than 8kms. from the local limits of any municipality or cantonment board and which has a population of more than 10,00,000.

(c) The revenue must not include any income arising out of transfer of such land.

Further, a direct nexus between the agricultural land and the receipt of income by way of rent or revenue is essential. (For instance, a landlord could receive revenue from a tenant.)

(ii) Any income derived from such land by agricultural operations including processing of agricultural produce, raised or received as rent in kind or any process ordinarily employed by cultivator or receiver of rent-in-kind so as to render it fit for the market, or sale of such produce.

(iii) Any income derived from any building owned and occupied by the assessee, receiving rent or revenue from the land, by carrying out agricultural operations: The building must be on or in the immediate vicinity of the land. It must be used by the assesee as a dwelling house or store-house or an out-building, in connection with the land.

Hence, we can consider income attributable to a farmhouse as an agricultural income, subject to the above conditions. Normally, the annual value of a building is taxable as ‘income from house property’. However, in the case of a farm house, the annual value would be deemed agricultural income and thus, be exempt from tax.

In addition to the above, income derived from saplings or seedlings grown in nursery is also considered as agricultural income.

In order to consider an income as agricultural income, certain points have to be kept in mind:

(i) Existence of a land.

(ii) Usage of land for agricultural operations: Agricultural operations means efforts induced for the crop to sprout out of the land. The ambit of agricultural income covers income from agricultural operations, which includes processes undertaken to make the produce fit for sale in the market. Both, rent or revenue from the agricultural land and income earned by the cultivator or receiver by way of sale of produce are exempt from tax only if agricultural operations are performed on the land.

(iii) Cultivation of Land is a must: Some measure of cultivation is necessary for land to have been used for agricultural purposes. The ambit of agriculture covers all land produce like grain, fruits, tea, coffee, spices, commercial crops, plantations, groves, and grasslands. However, the breeding of livestock, aqua culture, dairy farming, and poultry farming on agricultural land cannot be construed as agricultural operations.

(iv) Ownership of Land is not essential: In the case of rent or revenue, it is essential that the assessee has an interest in the land (as an owner or a mortgagee) to be eligible for tax-free income. However, in the case of agricultural operations, it is not necessary that the cultivator be the owner of the land. He could be a tenant or a sub-tenant. In other words, all tillers of land are agriculturists and enjoy exemption from tax. In certain cases, further processes may be necessary to make a commodity marketable out of agricultural produce. The sales proceeds in such cases are considered agricultural income because the producer’s final objective is to sell his products.


a. Agricultural income is considered for rate purpose while computing the tax liability for Individual/HUF/AOP/BOI/Artificial Judicial Person.

b. Losses from agricultural operations could be carried forward and set off with agricultural income for the next eight assessment years.

c. Agriculture income is computed in a manner similar to business income.


a. If a person sells processed produce without carrying out any agricultural or processing operations, the income would not be regarded as agricultural income.

b. Likewise, in cases where the produce is subjected to substantial processing which changes the very nature of the product (for instance, canning of fruits), the entire operation is not considered as an agricultural operation. The profit from the sale of such processed products will have to be apportioned between agricultural income and business income.

c. Income from trees that have been cut and sold as timber is not considered as an agricultural income since there is no active involvement in operations like cultivation and soil treatment.

Tax on sale of agricultural land: Before 1970, profit on the sale or transfer of all agricultural land was considered rent or revenue derived from the land. Such profit was, therefore, tax-exempt as agricultural income. There were several favorable judgments of various High Courts on the issue. However, via a retrospective amendment that took effect from April 1, 1970, land qualifies to be an agricultural land if the prescribed conditions are satisfied. An agricultural land does not form part of the definition of a capital asset and hence, there will be no capital gains on the sale of such land.

Any other land not forming part of the above will be a capital asset and sale of the same shall attract tax on capital gains subject to Section 54B, which is explained below.

Section 54B: Capital gain on transfer of land used for agricultural purposes not to be charged in certain cases

Section 54B gives relief to a taxpayer who sells his agricultural land and acquires another agricultural land from the sale proceeds.

Conditions to be satisfied to claim the benefit of this Section:

a. The assessee must be an individual or a HUF.

b. The agricultural land should have been used for agricultural purposes. It may be a long term asset or a short term asset.

c. It must have been used either by the assessee or his parents for agricultural purposes in atleast two years immediately preceeding the date on which the transfer of land took place.

d. The assessee should have purchased another land, which is being used for agricultural purposes, within a period of two years from the date of sale.

Note: In case of compulsory acquisition, the period of acquisition of new agricultural land will be determined from the date of receipt of compensation. However, as per Section 10 (37), no capital gain would be chargeable to tax in case of an individual or HUF if agricultural land is compulsorily acquired under any law and the consideration of which is approved by the Central Government or RBI and received on or after 01-04-2004.

e. The whole amount of capital gain must be utilised in the purchase of the new agricultural land. If not, the difference between the amount of capital gain and the new asset will be chargeable as capital gains and the tax will be computed accordingly.

f. The new asset purchased should not be sold within a period of three years from the date of acquisition.

g. If sold, the cost of the new asset will be reduced by the amount of capital gain (claimed as exemption under Section 54B) for the purpose of computing tax on capital gains.

h. Where the amount of capital gain is not utilised by the assessee for the purchase of the new asset before the due date of furnishing his return of income, he may deposit it in the Capital Gains Account Scheme (CGAS) of any specified bank.

i. In such a case, the cost of the new asset shall be deemed to be the amount already utilised by the assessee for the purchase of the new asset together with the amount deposited in the CGAS.

j. If the deposited amount is not utilised for the purchase of the new asset within the specified period, then the unutilised amount shall be taxed as income in the year in which the period of two years from the date of sale of the original asset expires.

Taxability of Agricultural income post amendment by Finance (No.2) Act, 2014

Agricultural income is considered for rate purposes while computing the income tax liability, if following two conditions are cumulatively satisfied:

i.  Net Agricultural income exceeds Rs. 5,000/- for previous year, and

ii. Total income, excluding net Agricultural income, exceeds the basic exemption limit.

Note: If aggregate agricultural income of the assessee is up to Rs. 5,000/- during FY 2018, then the entire income shall be exempt from tax. Accordingly, you need to disclose the agricultural income in the income tax return (ITR) 1 form to be compliant from the disclosure perspective. But if the agricultural income exceeds Rs.5,000, then form ITR 2 applies, which has a separate column for disclosure of agricultural income.

Once the aforementioned conditions are satisfied then we shall compute the Tax liability in the following manner:

♠ First, include the Agricultural income while computing your income Tax liability.

Example – Let us say that an Individual Assessee has a Total income of INR 7,50,000/- (excluding Agricultural income) and a Net Agricultural income of INR 100,000/-. Then, per this step, Tax shall be computed on INR 7,50,000/- + INR 1,00,000/- = INR 8,50,000/-. Thus, income Tax amount as per this step shall be INR 82500/- for an individual who is below the age of 60 Years during the P.Y. 2017-18.

♠ Second, add the applicable basic tax slab benefit, as applicable, to the Net Agricultural income. Thus, per our example mentioned above we shall add INR 2,50,000/- to INR 1,00,000/- as the applicable Tax slab benefit available to an individual below 60 Years of age is INR 2,50,000/-. Now we will compute income Tax on INR 3,50,000/- (Tax slab benefit 2,50,000 + Net Agricultural income 1,00,000). The amount of Tax shall be INR 5000/-.

♠ Thirdsubtract the Tax computed in Second step from the Tax computed in First step = INR 77,500/-. Thus, this is the income Tax liability subject to deductions, Education Cess etc., as applicable.

This process of computation is, however, followed only if the assessee’s non-agricultural income is in excess of the basic exemption slab.

Clearly, despite agricultural income being tax-exempt, assessees have to be cautious while dealing with such income. They must make sure that they aggregate agricultural income with their total income to avoid interest payments and possible penalties for concealment of income. Assessees must also maintain credible records to provide the tax authorities with proof of ownership of agricultural land and evidence of having earned agricultural income.

To conclude, there is enough scope for taxing income from activities which are non-agricultural in nature. In fact, it is well known that agriculturists themselves do not have taxable income, taking into account the fact that when it is divided amongst family members who are involved in agricultural operations, each one of them would have income within the exemption limit. However, there are hundreds of thousands of middlemen like wholesalers, retailers, distributors, etc. who earn substantial income from trading in agricultural produce as well as fruits, flowers, etc. Such income or profits are fully taxable under the present law and, therefore, if concerted efforts are made by the Tax Department to recover tax from them, the need for widening the tax base to rope in agriculturists and farmers, would be eliminated.

Tax Saving Tip:

Form a company or a partnership firm for the sole purpose carrying on your agricultural operations. As indirect effect of agricultural income is not applicable in a company or a firm, the complete amount would become exempt from taxation.

Frequently Asked Questions:

1. Does interest on arrears of rent qualify as agricultural income and will this be exempt from tax?

Sometimes, a tenant could slip up on rent or revenue payments (either in cash or kind) and have to pay arrears. If the landlord charges interest on such arrears, the income would not be considered as an agricultural income, but would be deemed income by way of interest and would, hence, be chargeable to tax. While ‘rent’ presupposes periodical and pre-determined payment (either in cash or kind), ‘revenue’ implies a sharing arrangement that depends on the actual agricultural produce. In either case, ownership of agricultural land or interest in such land is essential, which means, the owners of agricultural land, tenants who are given a sub-lease, and people who are mortgagees of agricultural land, all enjoy tax-free agricultural income.

2. If agricultural produce is processed to make it marketable at a place other than the agriculture land, then the amount charged for such processing will be an agricultural income or not?

Any processing done on Agricultural produce to make it marketable is a part of agricultural operations and such amount recovered will be treated as agricultural income only. Say for example trashing of wheat, mustard, etc is part of agricultural operations only and the amount recovered will be treated as agricultural income only no matter processing takes place on the land itself or some other place.

But in certain cases like in the case of tea, coffee, sugarcane where a major processing (change of very nature of the product) is being done, then some part of the processed produce (tea, coffee & sugar) is taxed as non-agricultural income and rest is exempt as agricultural income.

3. What if agriculture operation is carried on urban land?

If agricultural operations are carried out on land, either urban or rural, the income derived from sale of such agricultural produce shall be treated as agricultural income and will be exempt from tax.

4. If any industrial organization grows crops and sells half of the produce as raw material in the market and remaining (further processed) as finished goods, what will be the tax treatment?

Agricultural income is exempt from income tax. It does not matter whether the agricultural operations are done by an industrial organization or an individual. If any industrial organization grows crops and sells half of the produce as raw material in market and remaining (further processed) as finished goods, the income which is earned on the first half of produce (sold in market as raw material) is totally exempt from tax.

In case of the remaining produce which is further processed, scheme of presumptive taxation is applicable. Rule 7, 7A, 7B & 8 of Income tax Rules deals with such type of income. Rule 7A deals with Income from manufacture of rubber, 7B deals with Income from manufacture of coffee and Rule 8 deals with Income from manufacture of tea. Rule 7 says that in cases where income is partially agricultural in nature and partially from business, the market value of the agricultural produce which has been raised by the assessee or received by him as rent in kind and which has been utilised as a raw material, shall be deducted from the sale receipts and will be treated as agriculture income. The remaining will be considered as non agricultural income.

5. In my agriculture farm, I have 5 cows in Pune (Maharashtra). The product being milk is the main produce, and not a byproduct. Is this income an agriculture income or a taxable income? (This milk is sold to dairy product plant in nearest Co-op Society).

Dairy farming is not an agricultural income.

6. Why rent on land is treated as agricultural income?

Rent received from agricultural land used for agricultural purpose is treated as agricultural income. This is prescribed by the law.

7. I have a business income of Rs 3,00,000 and agricultural income of Rs 4,00,000. These figures relate to the Assessment year 2019-20. How will my tax liability be computed?

Agricultural income is exempt under Section 10(1) of the Act so long as the income is derived from agricultural land situated in India. This income is, however, included merely for rate purposes and rebate is allowed on the same in accordance with the Finance Act. The inclusion of Agricultural income for rate purpose is only required if total income( excluding agricultural income) of an individual exceeds Rs. 2,50,000/- (assessee being aged less than 60 years of age).

Particulars Amount in Rs.
Business Income 3,00,000/-
Agricultural Income 4,00,000/-
Income Including Agricultural Income 7,00,000
Tax on 7,00,000/- 52500/-
Less: Rebate on Agricultural Income
(Tax on Rs. 4,00,000 + Rs. 2,50,000 being basic exemption) 42500/-
Net Tax Payable 10,000/-
Add: Health & Education Cess @ 4% 400/-
Total tax Payable 10,400/-

 8. Can Interest on Crop Loan be claimed as an exemption?

The interest earned on Crop Loan cannot be claimed as an exemption by the provider of loan since the condition of ownership of land being not essential holds true only if the assessee has interest in the land. The provider of the loan may not have an interest in the land because it may be his ordinary business to provide Crop Loan. However, the farmer to whom the crop loan is provided can claim the same as a deduction while computing his tax liability.

9. If an assessee sells the fruits of the trees planted by him around his home, will the income so earned be agricultural income?

The trees planted by him should be on a land which can be classified as an agricultural land by fulfilling the conditions mentioned earlier in this article. If the land is agricultural, then the income earned by selling of fruits can be treated as agricultural income.

10. I have taken certain agricultural land on lease and crops are being grown on the said land for many years. Now the said land alongwith growing crops has been acquired by the Govt. The Govt. paid separate compensation for the land and the crop. Whether the compensation received in lieu of crop is agriculture income or not? Further note that assessee has not further invested the amount in agriculture land received as compensation against crop.

The compensation paid for the crops by the Govt. can be considered to be as good as income earned by purchase of standing crop, which is not an agricultural income. Hence the compensation against crop is taxable in the hands of receiver of the compensation.

11. Whether income earned from export of agricultural produce is exempt from income tax?

The conditions for considering the income as agricultural in nature have to be satisfied if the agricultural produce has to be exempt from income tax. Middlemen dealing in trade of agricultural produce are generally not entitled to exemption due to lack of satisfaction of the conditions.

12. I have an income of Rs.1,45,000 from my business and an agricultural income of Rs. 8,40,000. Do I need to file the return of income?

The process of computation of tax liability is followed only if the assessee’s non-agricultural income is in excess of the basic exemption slab. In this case, the income from business of the assessee is lower than the basic exemption limit. However, the returns have to be filed with regards to the disclosure of agricultural income.

13. An assessee wants to buy farms which bear coconut trees, on a lease for a period of one year. State whether sale of coconuts is said to be an agricultural income or not?

The land on which the coconut trees are planted should be an agricultural land which can be classified by fulfilling the conditions mentioned earlier in this article. If the land is agricultural, then the income earned by selling of coconuts can be treated as agricultural income.

14. I had sold an agricultural land in a rural area, which is outside jurisdiction of the Municipal Authority. Whether the sales proceeds are exempt or taxable?

The scope of agricultural income excludes the revenue which is earned by transfer of agricultural land not falling under the definition of Capital assets u/s. 2(14). By definition of a capital asset under Section 2(14), an agricultural land in an area falling out of jurisdiction of the Municipal Authority (which has a population of more than 10,000), is not a capital asset. Section 10(37) allows income from transfer of such a land to be classified as a capital gain via clause (i). Under Section 54B, a capital gain arising out of this transaction will be exempt provided the conditions (mentioned earlier in this article) are satisfied.

15. Is receipt from sale of rubber trees an agricultural income?

Yes, receipt of sale of rubber trees is an agricultural income if the conditions for land being agricultural in nature are satisfied.

(Republished With Amendments)

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More Under Income Tax


  1. Anjali kesri says:

    State whether the following are chargeable to tax with support from

    Income tax laws for the previous year 2020-21: a. Rent of Rs. 86,000 received for letting out agricultural land for a movie shooting.

    b. Agricultural income to a resident of India from a land owned in

    Canada worth Rs. 28,000. c. A political party registered u/s 29A of the relevant act earned rental

    income of Rs. 731,000 by letting out its premises and the accounts are properly maintained by party in this regard.


    An assessee during FY 2020-21 having business turnover of Rs.1.95 crores and declaring profit u/s 44AD @ 8% of sales has also sold agricultural produces grown on his agricultural lands to the tune of Rs.11 lacs. Whether he would be liable to get his accounts audited, u/s 44AB of the I. Tax Act.

  3. Herman M Sequeira says:

    is there any benefit for Association of persons on agricultural income. Can auction of fishing rights be classified as agricultural income

  4. Nileshbhai says:

    Hello sir,
    I am earning salary income below yearly taxable limit and regularly filling ITR-1. I have agriculture land also but not any income from crop cultivation. I have received Rs.6000 amount from PM Kishan scheme of Central Govt. and other total relief of Rs.16500 from State Govt. for loss of crop due to un-season rain including scarcity of rain in previous year as well.
    Now, My Question is (1) Are these received amounts agriculture income? (2) Which ITR Form i have to consider for ITR filling? (2) Are these Govt.reliefs need to show in ITR and under which head?

  5. Nileshbhai says:

    Hello Sir,
    I am earning salary income below yearly taxable limit and regularly filling ITR-1. I have agriculture land also but not any income from crop cultivation. I have received Rs.6000 amount from PM Kishan scheme of Central Govt. and other total relief of Rs.16500 from State Govt. for loss of crop due to un-season rain including scarcity of rain in previous year as well.
    Now, My Question is (1) Are these received amounts agriculture income? (2) Which ITR Form i have to consider for ITR filling? (2) Are these Govt.reliefs need to show in ITR and under which head?

  6. Nileshbhai says:

    I am earning salary income below yearly taxable limit and regularly filling ITR-1. I have agriculture land also but not any income from crop cultivation. I have received Rs.6000 amount from PM Kishan scheme of Central Govt. and other total relief of Rs.16500 from State Govt. for loss of crop due to un-season rain including scarcity of rain in previous year as well.
    Now, My Question is (1) Are these received amounts agriculture income? (2) Which ITR Form i have to consider for ITR filling? (2) Are these Govt.reliefs need to show in ITR and under which head?

  7. Brij Anand says:

    I am salaried person and having agriculture income of INR 5 lacs also. I come under 30% tax liability as per salary received for the FY 2019-20. I need to know
    if INR 5 lacs is taxable which is agriculture income,


      i possess 10 acres of agricultural land. In that, i had grown 30 quintals of red chillies per acre, which corresponds to 300 quintals per 10 acres. Present rate per quintal is Rs. 12000/- which comes to Rs. 36,00,000/- per 10 acres. The total cultivation cost incurred is Rs. 15,00,000/- per 10 acres hence the net profit on this cultivation is 21,00,000/- Agricultural land was in my name. what else proofs i require to produce and claim in ITR that Rs.21,00,000/- was acquired by me through agricultural cultivation of dry chillies. Please guide sir.

  8. hardik says:

    dear sir,
    i want to take agriculture land on rent to grow crop on it. Is income taxable arrived from that rented agriculture land?

  9. chkumari says:

    Hi sir,

    I want to know if a person earn income only from Harvesting Machine not from agricultural land. He is taking his Harvester on others land then that rental income earned is taxable or Not
    If not why ?? can anyone can answer my question please

  10. Arun Patil says:

    Dear Sir,

    I would like to know agriculture land sold in road widening along with interest paid by GOVT is 100 % exempted or Interest amount needs to shown seperately against interest received column.

    Please Advice.

    Thanks in Advance.


  11. D Chakrabarti says:

    I have entered into an agreement and arrangement with an agri land owner for raising a nursery and plantation incl production of saplings ,seeds etc All costs are borne by me and the profit from the agri operations are being shared between us Will my income be treated as Agricultural income in the hands of the receiver

  12. R B Singh says:

    My status is HUF under IT laws. I have an income of RSS. 5 lake from agriculture , Rs. 30000 as saving Bank interest and capital gain tax as nil (zero) by redemption of two equity mutual funds in
    AY 2019-20. Whether I have any liability to file income tax return in AY 2019-20.

  13. Jai Kumar Jain says:

    I am a teacher and my 4 bigha land in municipal area is acquired by Government. I have produced girdavri report but IT authorities are sayin that you have not cultivated because you are a teacher and asking four capital Gain. Pls advise

  14. jagtar singh says:

    i was purchased agriculture land on date 10/05/2012 from octori 11km.then govt.acquired my agriculture land for NH-1 ROAD.AND I RECEIVED COMPENSATION NOV.2017.THIS amount used for individual purpose not for purchase give me advise this amount is taxable or exempted,otherwise taxable then clear the tax ratio

  15. MUKESH KUMAR says:

    श्री मानं जी मेरी सैलरी इनकम 450000 लाख हे और एग्रीकल्चर इनकम 500000हे तो मेरे को कितना टैक्स पेय करना होगा जी

  16. Gowtham says:

    Greetings Sir,
    I have a doubt in treating of income from compulsory Aquistion ,I own 10 Acres of agricultural land in Tamil nadu (Rural area) and i was having Coconut trees .TANGEDCO(Tamilnadu Electricity Board) have aske cut down my trees to put their Electric Towers and they have paid compensation.amount of Rs.25,00,000.
    So my Doubt is whether I should pay long term capital gain taking the coconut trees as capital assets ?
    and also can i claim exemption under section 54 D
    as i have used the money to buy another agri land nearby.
    please help me in this regard…..
    Thank you.

  17. Sadanand Singh Bhadauria says:

    Dear Sir/ Mam
    I posted below issue on
    November 20, 2015 at 12:24 am but but don’t get solution till now. pls someone send suggestion on :
    I have planted BER, Semiyalata plants in 4 acre agricultural lands. for proper growth of plants we apply agri. operations i.e tillage, fertigation, pesticide spray, weeding etc also.I am cultivating LAC on these planted BER & Semiyalat plants, existing kusum tree on own agricultural land and some rented kusum trees outside. In lac cultivation scientific method (tillage, fertifation/ manuring , weeding, seed inoculation, pest control, harcesting etc is adopted by us. The income from such type of scientific lac cultivation on our agricultural feild is Agricultural Income or taxable. pls suggest us.

  18. manish reddy says:


  19. manish reddy says:

    I had only agricultural income of 10lakhs and no non-agricultural income.Should I file a return for my agricultural income as per income tax,act.If yes,what is the section and return should I comply with

  20. Ketki Dagha says:

    Is LLP exempt from income tax for sale of agricultural produce like fruits and veg? Agri land is in the name of partners and his brothers. Further if LLP gives rent to landlord will such rent be exempt in the hands of partners?

  21. vinay kumar singh says:

    An assessee discloses agricultural income of Rs.30 lac. Enquiry reveals that the income shown is gross receipt and not net agricultural income. The assessee owns only 20 acre of agricultural land and claims to have carried out agricultural operations on lands owned by his relatives. The land of relatives has not been taken on lease or rent. No consent letters of other owners have also been obtained and filed by assessee. No details/account of expenses have been filed.
    Whether the agricultural income derives from cultivation of land of relatives will be treated as agricultural income of the asdessee?

  22. Bharti Budhwani says:

    Compensation received from government for the crop destroyed will be treated as income or will be exempted from tax or we have to pay the tax on it

  23. Nilesh Bhade says:

    1] Agricultural land owned by A used by B for agricultural activity. There is no formal agreement between the two for use of land. Can B offer agricultural income in his I T return?(A & B have no blood relation)
    2] A & B are in blood relation , there is no express agreement and no rent charged by A to B for using land for agricultural purpose. Can B offer income derived from agricultural activity in his return of income? ( land owner A)

  24. VARUN KUMAR says:

    very good. it gave a best cocept of taxation on ag. income.

    how much bank loan is receibable on 20 lakhs income shown in tax filing to income tax acts.
    pl.give an advice in this regards also pl.

  25. Dharmendra says:

    Hi I m dharmendra my business income is 9,00,000(nine lakh)
    andMy agricultural income is 10,00,000 (ten lakh)
    how name tax of financial years 2016-2017
    My age 61

  26. SEEMA VARMA says:


    SEWING & STICHING WORK INCOME         132800



    AGRICULTURE INCOME                                 46500


  27. SEEMA VARMA says:


  28. Nitin singh says:

    Sir there is one query if the soil of agriculture land is used for construction of irrigation canal and a compensation of rs 200000 is received is it taxable or not

    Thanks sir

  29. Phani Kumar says:

    Sir, Thanks for Useful article. My Concern is that if Consultancy Fees (Net) is 3 laks and Agricultural Income id 5 Lak. What will be my Tax liability.

  30. Jagdish says:

    Sir ,
    The article has been quite useful for my basic understanding.
    I do have a case question of self . Pls help.
    My father has an agricultural land and derives agriculture income from that . Further he has taken up tasks to improve/ provide/lay down the water supply/ canal and irrigation systems of other farmers on their lands in lieu of share in their income from agriculture produce for next 2-3 years . Bonds are also made properly for that matter .Now would this revenue as regards a share in their agricultural income as per the contract/bonds constitute AGRICULTURAL INCOME or BUSINESS INCOME?
    I’m unable to find relevant sections/ rules .
    Kindly help.

  31. Basavaraj says:

    Dear tax guru.. happy new year and wish you very great year ahed.
    My query is, we grow field field crops like Redgram, Chana, Bajra etc. We sell the produce to local middle man and he in turn give money in the form of cash without any invoice. Now, how to show it as agriculture income? Is there any way to pay APMC Cess and show it as income in ITR ? WHAT IS THE SOLUTION FOR THAT ?

  32. Sridhar says:

    For an NRI US Citizen, if we buy agri land in parents name, can NRIs inherit back after them. What additional taxes we need to expend at time of inheritance.

  33. Jitendra Sanandia says:

    Dear Sir,
    I have being cultivate in my father’s agriculture land .at the time of selling crop,trader demand 7-12 of land give my father’s name bill and what to do for my name’s bill and cheque.

  34. Nandeesha says:

    Dear sir,
    I earned salary annual 3,00,000/- Professional charge 90,000/- Agriculture incom 3,00,000/- it’s related my father, but my account transfer how is calculated income tax

  35. Kuldeep Bhardwaj says:

    I am salaried person and annual income of Rs. 1200000/-. I have one ha. agricultural land also. Should I how Agricultural Income in my e return and which form should file.

  36. Dheekshitha says:

    We have a farm and we cultivate coconuts. I would like to know if the buyer of our coconuts is tax exempt?
    Thank u in advance for clearing my doubt

  37. Rajesh Kris says:

    Hi, I am a private sector employee and a tax payee for my income. I would like to invest on agriculture by forming a company and buying land and start cultivating herbs and aromatic plants. Can I file for tax exception for this kind of investment? The money investment I am planning would be taken as loan from NABARD or any other such kinds of banks. Please let me know if anyone has any similar idea/experience about this. thank you. 9642298187
    [email protected]

  38. G Banari says:

    Kudos for an excellent article. Can you pl. clarify my doubts as under:
    1. if an individual having solely agricultural income more than minimum tax slab (ex : net agr. income of say 5Laks, but no other income) he has to file tax returns compulsorily?
    2. My understanding is that if wife gets agricultural land from her parents or the husband transfers his agr. land permanently to his wife with proper registration stamp duty paid, then the income from such land is solely hers and not to be clubbed in husband’ hand. Is this correct?
    Thanks in advance,
    G Banari

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  40. prem singh says:

    Sir, I am a central govt. employee. I have some agricultural land in my name. Every year I rented out it to my neighbour. What and in which form should I keep the proof of rent that could be shown to income tax authorities for their duly satisfaction, if need.

  41. shivam says:

    sir i hav some Agriculture land which is received by inharitance from my father and if i sold that land trhough ploting than what shall be tha tax consiquances?

  42. Vijaykant D says:

    sir, I want to start business of selling juices by purchasing raw grapes from farmers and process it into canned juices.
    Will this be treated as agricultural income , if not what best option i can do to count it as agriculture income.?
    Please provide what best arrangements can be done

  43. JIJA says:

    Sir I have sold some Agriculture land in FY 2012-13 in a village beyond 8kms of a Muncipality. When I sold , I have sold some cattle’s and seedlings a few days before and the money was promptly deposited in the Bank instead of generating as Black money in general cases. I have claimed capital gain tax exemption on Agricultural land and others as Agricultural income.
    Now AO want to
    1. reassess value of the Cows as regular income
    2. Increase the value from the Circled value ( guideline value ) to the Govt. valued registered price on a date lat.
    Please give me case laws of sales of own grown cows are Agriculture income
    Latest ruling under KP Varghese Vs ITO case (131 ITR p 597 ( SC) when the full consideration is received before registration and transfer of possession.

  44. Nikit says:

    Good Information Sir.
    I have some questions.
    A partnership firm is engaged in agricultural activities only.
    > Is it required that all the partners should be contributing to such activities?(i mean some partners are just sharing the profit and not actually carrying out activity, are they eligible for exempt income?)
    > Is it necessary that the land should be in their co-ownership, or is it fine if it is in name of one of the partner?
    > Is it necessary for each to be Agriculturist to be a partner in such a firm generating only exempt income?
    Any help or guidance would be highly appreciated !

  45. Shubham A. Patel says:

    Dear Sir/ Madam,
    Please tell me that Tubewell Income which is used in agricultural Land for giving water to trees and plants is consider as an Agricultural Income or not?…
    Wheather it is exempt from Tax or Not?

  46. Minal says:

    My question is that why agricultural income is not included in any of the heads of income..? It could have included in any head and thereafter excluded.But it did not find place in any head, why so..?

  47. shobha says:

    I have two quires
    1 . my salary income is 10 lakhs, I have agriculture land in my name guifted by my father , who presently cultivates it . I get approximately 4 lakhs / pa as agriculture income!crop sold by my father , gets money to his account , then he transfers the money to my account. As bills not in my name can this be considered as my agriculture income! And does this income exempted from income tax!?
    2 . my father in law wants sell ancestral agriculture land, whether money he gets from selling is taxable or not?

  48. Sadanand Singh Bhadauria says:

    Dear Sir
    I have planted BER, Semiyalata plants in 4 acre agricultural lands. for proper growth of plants we apply agri. operations i.e tillage, fertigation, pesticide spray, weeding etc also.I am cultivating LAC on these planted BER & Semiyalat plants, existing kusum tree on own agricultural land and some rented kusum trees outside. In lac cultivation scientific method (tillage, fertifation/ manuring , weeding, seed inoculation, pest control, harcesting etc is adopted by us. The income from such type of scientific lac cultivation on our agricultural feild is Agricultural Income or taxable. pls suggest us.

  49. vikas jangra says:

    Compensation received from government for the crop destroyed by hailstones will be treated as income .whether it will be exempted from tax or we have to pay the tax on it .

  50. KIRAN K R says:

    A company that derives its income from sole agriculture and its annual income exceeds 10 lac per year will it be exempted from taxation.
    what kind of company should be formed to get complete exemption from paying taxes

  51. Mallikarjuna says:

    Dear Tax Advisor,

    I have joined banking sector in the year 2003 and till date, I have worked in different banks for period of 11 as of now. My providend fund accumulated withdrawn in the year 2014 and my previous employer deducted tax on PF withdrawal.

    Please advise me in my case tax is applicable or not.

  52. Paulson says:

    Whether Pvt Ltd company will get exemption from agricultural income. In your article, company is not included and also dividend from company earning agricultural income is not exempt. Is lease deed to be registered in Sub Registrar office of agricultural land for tenant. Is it necessary to prove purchase of seeds, produce, workforce etc

  53. r.k.garg says:

    I want know if I buy apple from Shimla and than put on cold starage and aft some time I sale in market and that profit will be tax free or taxble

  54. Vikram says:

    If I sold my agriculture land approximate 45lakh,and this money I draw in bank for fd.can I exempt in tax,please tell me how many years I rebut from tax

  55. Ravi Kumar says:

    Sir, if I sell the fruits of the trees planted by me around my home, will the income so earned be agricultural income? please reply

  56. laxman says:

    how much income iexemputed on agriculture per annum what is the limit that can be earned from 1 acre of land
    2 if any nri or relative send amount to india is tha amount taxable

  57. vinod garg says:

    I plan farming in green house ( pollyhouse ). I plan to grow flower and vegetable in this green house for export. Is the income from this green is taxable or this is a agriculture income which is exempt. please post me answer.thanks Vin

  58. Prabhat Shrimali says:

    Dear Sir,

    Good Evening..

    I’m planning to start a dairy and poultry farm in future. I just want to know what kind of taxes (e.g Income Tax, Sales Tax) and how much I’ll have to pay on certain income I got from above farming?
    Also what should I do in order to get exempt from or reduce these taxes?

    Thanks in advance.

    Prabhat Shrimali

  59. S. K. Goyal says:

    I have taken certain agricultural land on lease and growing crops on the said land for many years. Now the said land alongwith growing crops has been acquired by the Govt. The Govt paid separate compensation for the land and the crop. Whether the compensation received in lieu of crop is Agriculture Income or not. Further note that assessee has not further invested the amount in agriculture land received as compensation against crop.

    S.K. Goyal

  60. venkataramana says:

    My father is cultivating the land on Name for past 8 years. I did not claim the agriculture income till now. Now if I want to claim last 8 years earnings, can I do it in this year?

  61. mewa singh beniwal says:

    I belong to a village and have agriculture income. I have Term Deposits in Village Bank itself. Please advise if TDS will be deducted against interest on term deposit and method to save the TDS. Please respond immediately.

  62. Mahaveer says:

    I work for MNC company at Bangalore and I also own 5 acres for Agriculture land which came to my name from my Parents. Can I apply for tax rebate on my my monthly salary?

  63. Kunal Shah says:

    If any one wants to become farmer or purchase very cheap agricultural land let me know. I can help save alot of taxes
    kunal.16 at hotmail dot com

  64. prakhar says:

    my uncle sold the agriculture land in urban area in f.y 12-13. he invest his money of net consideration in purchases of agriculture land before filling the return u/s 139(1).so that he can claim the exemption u/s 54B.He has made the payment through RTGS against the purchases of new agriculture land and also take the possession of the new agriculture land BUT COULD NOT register this land through the registrar by paying stamp duty.
    can he right to claim exemption u/s 54b

  65. anil k says:

    I m salaried peson & having taxable income I want to purchase agricultural land can I purchase it on my name or wife’s name or my huf account …pls suggest … reasons … benefits in income tax…. regards… anil k

  66. Dr.Jatin says:

    sir.. I am planing to start a aquaculture farm on a marshy land which is certified dept of fisheries.will my income on this farming will be tax free??

  67. patil says:

    MY FRIEND HAS AGRICULTURE LAND 50 ACRES IN ANDHRA PRADESH & PARTNERS SELF & MRS. 1) this PARTNERS ARE OK FOR THE PARTNERSHIP FORM. 2) Can PURCHASE AGRICULTURE LAND. 3) Retun it file is compulsory 4) Agriculture land celling acts in andhra pradesh 4) can increase partnership members

  68. RAJEEV says:

    MY Question is Mud extracted from agriculture land and sold , Whether consideration received on sale of mud of agriculture land is taxable or not, (agriculture land is not urban agriculture land), kindly explain.
    With Regards,
    Rajeev Puri

  69. navjot says:

    heloo sir plz sought out my query my q. is in the income tax act agriculture land will be considered as an Rural Agriculture Land if it is not situated any area within the distance measured aerially of not more than the limits given by IT dept.but during the course of assessment in Income Tax act 2013 what kind of document will be considered an appropriate proof that a parti cular land is “rural Agriculture Land”. plz help me plz answer this question sir…

  70. Bhoopathy Bhaskaran says:

    Sir, I have an agricultural income of 5,00,000 rs last year. Now to claim agricultural tax free income what are the reciepts and documents required to show to the income tax officers in case of any enquiry etc.

  71. bhaskara vukkem says:


    we want to take farms which having coconut trees for lease a period of one year sale of coconuts is agricultural income or non agricultural income

  72. S JEGADEESAN says:

    Dear Sir,
    I wish to clarify a doubt .i.,e.A Partnership firm doing the business of export the live plants.Now it want to file the IT Return.How that firm can claim the exemption? i.e. where Should I mention the Exemption of Income(Agri Income) details in ITR-5?

  73. maninder says:

    if income from post office commission is Rs56000per annum and agricuture income is rs60000 per annum then which ITR form should be used ?

    and is it needed to show the agriculture income in ITR form while the total of income from commission and agriculture income is less than Rs150000?

    I am asking this question in refrence following line in your article so please guide
    “The inclusion of agricultural income for rate purposes is only required where the total income exceeds Rs 1,50,000.”

  74. Chandan Singh says:

    My assessee is having a godown at Barauni (Bihar). The godown is used fo storage of agricultural product. So,Whether the income derived from such dodown is taxable or not. Please reply

    CA Chandan Singh

  75. jeetu patel says:

    Sir, I want calrification regarding I had sold agricultural land in Rural area which is outside the Municiple area it is exempt or taxable if is it is exempt than where I report in My ITR-3 I am a partner in firm.

    Pl. reply urgently

  76. MONANK says:


  77. Mehul says:

    where exemption is claimed u/s 54B, and the new Agri Land is sold within period of 36 months (1) for which year taxability arise, the year of original sale or the year in which new land is sold (2) Agri Land is not capital asset, so if i reduce COA of new asset by amount of exemption taken (say any amount), the gain should not be taxable because it is not a capital asset (2) if diversion for question 2 then under which head of income calculation shall be made.

    Eagerly waiting for reply.

  78. Rohit Pandey says:


    i’m looking for Dairy farming & Herbal Products
    pls. suggest me what are the subsidy or Rebate on the above.
    although i found land for the same,trying to get bank loan for dairy farming.

    I have a pan card but due instability of job i’m not submitting any of my returns(2010-12), is it possible to pay tax of all previous year i.e 2010-12.

    if it is possible by paying penalties for same then kindly confirms me.



    We are facilitators can help people getting LEGAL FARMER Status by which he or she can buy any agriculture land in any part of INDIA and enjoy benefits of present and post FDI benefits on AGRICULTURE income and capital gains.


  80. Renu says:

    I have a firm which earns revenue from agricultural activities. My drawings from this firm of which I am the proprietor, is deposited in a savings account which is in my personal name. This amount earns me substantial SB interest. How will this SB interest which is earned, be treated from a taxation standpoint?
    I also have some FDs(Fixed Deposits) in my name whose source is agricultural income. How will the interest earned from these FDs, be treated from a taxation standpoint?

  81. Pradeep Kumar says:

    I have purchased agricultural land 8 bighas and 3 biswas in delhi on 06-0601991 of Rs.7,93,000/- (Rupees seven lacs ninty three thousand only) and land was muted in my name but on 8-6-92land was acquired by DDA for residential township Dwarka. Due toclerical mistake my land was categorised low rate land and I got compensation only 3,93, 000/- by AWARD in Oct. 1994 that I went to Hon`ble court of law for actual compensation, finally now I got Rs.3400000/-(Thirty four lacs), in which I got Rs. 2400000/-(Rupees twenty four lacs only) as interest plus soletium ect and at the time disbursement of amount hon`ble court deducted TDS at the rate of 10% about 245000/- only.
    I am not awrae how much tax I have to deposite in the Income Tax or should I file capital gain, because now my land `s actula cost in many crores. I am very much looser.

    I shall be very grateful and thankful if you kindly guide meon the above mentioned request.

    Looking forward for your favourable reply.

    Thanks & regards
    Pradeep Kumar

  82. Harit says:

    If I enter into an agreement with land owner of agriculture land, where I take the land from them on lease / rent basis , pay them rent and do the agricultural operations by myself. Will the income from the sale of the agriculture produce (produced by me n my team), be considered as agricultural income and exempt from tax? 

  83. Syam Kumar Manda says:

    Iam going to start a Dairyfarm Vth 40 Buffalos. The Project Report was done for 60lacks and iam going to take loan from SBI. Already iam filing returns since 2008. I have 12 Acres of Agricultural land which i have got  after my fathers death through a registered WILL. so every year i used to file agricultural income as 1,90,000 and my business income nearly 2lacks. I have stopped my old business. Now iam starting Dairy farm so, kindly assist me which is the best tax saving way to start the dairy farm, imean on individual name or else have to start on sole proprietor by registering a firm or partnership firm.
    kindly assist me as early as possible.
    Syam kumar Manda.


    dear all,

    please clarify whether the service tax will apply for the royalty on use of trade mark for selling the sowing seeds (agricultural products)

  85. Arun says:

    there was the land acquired by government to extend the highway and GOvt paid the compensation for the land. Please let me know whether that compensation is taxable ? 

  86. clawtin says:

    Respected Tax Guru Sir 

    i have a doubt i am planning to buy a Residential Plot of 200 Sq Yards in Hyderabad near manasanpally Sir Do i have to pay ANY Tax for the PLOT????

  87. koushik says:

    sir we are two brothers planning to start a dairy farming business on my mothers agricultural land. please advice us regarding the following options to start the business w.r.t tax benefits
    1. As HUF
    2. As a Partnership
    3. In Individual capacities

    please reply to my mail as soon as possible sir

    note: the above business is on agricultural land in rural area and the gross receipts were about 25 – 30 lakhs per annum. Also advise us whether we require to file a return if we start the business this AY.

  88. vikas sharma says:


    we are installing a cold store unit and there is exemption in central excise tax on the purchase of machinery from manufacturer and we have provided a bank gurantee in favour of assistant commissioner for this and now they are asking for the registration of farm with central excise . Is it necessary to register the farm with them as it is only service unit for taking the benifit of central excise

  89. K L SAINI says:

    SIR WHAT IS THE DEFINITION OF RURAL AGRICULTURE LAND FOR CAPITAL GAIN PURPOSE.If there are two conditions for testing rural agriculture land please tell whether theres are cumulative or not

  90. Ritesh says:

    Hello Sir,
    I’m planning to start a dairy and poultry farm in future. I just want to know what kind of taxes (e.g Income Tax, Sales Tax) and how much I’ll have to pay on certain income I got from above farming? Also what should I do in order to get exempt from or reduce these taxes?

    Thanks in advance.


  91. Vasishta says:

    Dear Sir,
    We are an agriculture company. Seeking funds to expand our operations. Investors are keen to know whether returns (payback principal + part of profit generated) are exempted from tax. Investor are offered stake in the company. Once they exit, are their returns tax free? If we pay dividends to investors, are these exempted from central and state taxes?
    Thank you / Kind Regards

  92. pooja varshney says:

    income received from letting a land situated in india which is used for agricultural it agricultural income?explain.

  93. naren says:

    what happened if agriculture income declared in income tax but not computed with business income and tax paid as per business income

  94. T.Augustus Immanuel says:

    Is it mandatory for a person who is deriving his total income from agriculture to
    a) obtain PAN
    b) file Income Tax
    c) be liable to pay tax on Interest on Bank Deposits when it exceeds Rs.10000/- p.a

    What should he do for non deduction of TDS on interest on bank deposits even if it exceeds RS.10000/- p.a.?

  95. Dharmendra Kumar Saini says:

    I sell my agriculture land.
    1- In the tahasil we paid stamp dutty on cercle rate but we received the amount on market rate. Please tell me the above amount of agriculture land from cercle rate is taxable or exempt under the income tax act.

  96. bhupi patel says:

    Requesting you to please send me the answer on asap please on my e mail address:
    I have got an agricultural land & would like to give it to my friend to build his farm house at his expenses. Can I do it on lease or rent. What will be the tax implimentation on this lease or rent.

  97. debashis says:

    whether amount received from selling of farm house which is situated outside the local limist of Municipality attracts section 2 (14) i.e. is it totally exempted or not?
    In my view section 2 (14) is applicable only for agricultural land and not for farm house. Please comment and give reply urgently.

  98. p.tandon says:

    Remuneration clause u/s40(b) of the ITAct’1961 have been changed in FY2009-10.
    plz guide us , how we will made change/add in remuneration clause of our present p/deed as to take maximum advantage of book profit as we do not want to file a return of loss in future?

  99. sunil sharma says:

    before two years i had purchased Agricultural land and now i want to sale it with some profit as a Agricultural land. or this property situated at vilage there below 10000 population or no munciple corporation.

    pls suggest me if i will be earn some profit from this Agricultural land is this taxble or not.

  100. Bhavin says:

    In F.Y. 2010-1 I will get
    1) Net Salary-3,00,972/-
    2) Net Agriculture income- 1,10,000/- (Approx)
    3) My Investment u/s 80 will be 1,00,000/-
    4) My investment u/s 80CCF (infra structure bond) will be 20,000/-
    How much I have to pay tax? Please explain calculation.

  101. Amit T says:


    Is Agriculture Income by a private ltd company taxable in India?
    We want to form a private limited company for doing agriculture. Please advise.

    Thanks in advance.

  102. raj kacheria says:

    i m starting a ripening chamber where i will be purchasing raw fruits from farm and then ripen it in my chamber and then selling it
    will this activity be considered as as agriculture income in a partnership firm?

  103. kamal garg says:

    my query is
    the income from transfer of rural agriculture land included in the definition of agriculture income?

    hope i will receive ur reply as early as possible

  104. Karun Nagpal says:

    Please Let me Know whether following would be taxable or not?

    “Land area selected for greenhouse cultivation in Garhshankar (Hoshiarpur) falls under classification of rural land. Agricultural activities are carried out on adjacent lands also. The project envisages setting up of nursery, greenhouses and packhouse with a transit cold storage of capacity 25 MT. Land will be taken on lease for overall operation from cultivation to farm gate delivery. Post harvest management infrastructure including sorting/grading hall, quality control room, pre-cooling, cold storage, loading and unloading platform will be part of the packhouse.
    Hi-tech cultivation practices are to be adopted for raising high value vegetable crops. High value exotic vegetables such as cherry and beef tomato, colored capsicum, European cucumber and herbs will be raised and in future, other crops can also be selected according to domestic market demand and export opportunities.”

    Karun Nagpal

  105. Suresh Paghdar says:

    my querry is question of adding agri and non agri income arise when non agri income exceeds basic threshold limit. while calculating non agri income deduction u/s 80 to be deducted or Gross income to be considered ?

  106. Dr Sanjay Agarwal says:

    I am having a private limited company that is agri based and sale agriculture land on which company is making fruit orchards.Can these land be considered as agri land.

  107. CA.KAMESH KUMAR says:

    My query is in relation to Wealth Tax Act, 1957 and is as follows :

    This query relates to application of the provisions of Wealth Tax provisions to Urban land used for Agricultural purposes :

    This Query primarily refers to taxability or otherwise of Agricultural Lands situated within Urban areas and being used extensively for Agricultural activities. In such a situation some of the Wealth Tax Officers / Assistant Commissioner of Wealth Tax / Dy. Commissioner of Wealth Tax / Commissioner of Wealth Tax / Commissioner of Wealth Tax ( Appeals ) have been consistently taking a stand that such Agricultural Lands fall with the purveiw of Wealth within the meaning of Section 2(ea) (v) – which defines Urban Land. For the sake of ready reference the provisions contained in Section 2(ea)(v) are reproduced as below :

    Weath Tax is chargeable only on the assets specified in Section 2(ea). Section 2(ea) (v) states that :

    Urban Land, being land situated in any area, within the jurisdiction of a muncipality or a cantonement board which has a population of not less than 10000; or within 8 Kilometeres from the local limits of such muncipality or a cantonement board, as the Central Government may notify.

    However, Urban Land shall not include :

    1. Land on which construction of a building is not permissible under any law or the land on which building is constructed with the approval of appropriate authority,

    2. any unused land held by the asseessee for industrial purposes for a period of two years from the date of its acquisition by him, and

    3. any land held by the asseessee as stock in trade for a period of ten years from the date of its acquisition by him;

    It may be noted here that Construction of buildings on Agricultural Lands except for a single unit of Farm House less than 500 Sq. metres is not permissible under the local laws of each state,

    Further the section itself is using the term ” Urban Land “, which does not signify Agricultural Lands.

    Also request your goodself to kindly throw light in veiw of : CIT v. Siddarth J. Desai (1983) 139 ITR 628 (Guj), CIT v. Manilal Somnath (1977) 106 ITR 917 (Guj).

    And Chennai High Court Judgement in the case of CWT Vs. E.Udayakumar ( 2006 ) 284 ITR 511 ( Mad ), Tara Singh vs. DCWT ( 2006 ) 97 ITD 482 ( Amritsar Trib ), Charan Paul Singh Mann & Jagra Singh Mann Vs. ACWT ( Chandigarh Tribunal ) and ITAT Hyderabad Bench in the case of Penzal Investment & Trading Co. (P) Ltd. v. Assistant CWT (2000) 75 ITD 39 (Hyd-Trib). In this case the Hyderabad Tribunal relied upon / cited various land mark judgements while discussing the issue regards taxability of Agricultural Lands situated in Urban areas and used for Agricultural purposes.

    Needless to say I would be either in touch with you over Telephone or met you in person as regards Consultancy Charges are concerned, or I would request you to kindly send a e-mail in this regards.

    Request your goodself to kindly mail the opinion on the e-mail address given below.


    TEL.NO.(OFF) 0240-2337153/2323353
    TEL.NO.(RES) 0240-2338922
    email : [email protected]; [email protected]

  108. kiran says:

    my mother had made a will to give the revenue generated by selling the agricultural land to me. i got around 18 L. the land is agricultural. in rural area.
    this amt i intended to give it to my wife and transferred from my account to her account.
    she took a commercial premise on that money.
    pl let me know about the tax.
    thank you.

  109. Pushkaraj says:

    I wish to know weather agricultural income made from non agricultural land will be treated as non taxable agricultural income?

  110. Vijay Kumar says:

    The author has not shed light on the applicabillty of section 14A read with Rule 8D in respect of income claimed to be agricultural income by any persons having different sources of income, including agricultural income

  111. Kamlesh Patel says:


    Thankk you for prompt response. I had one more question.
    Would it be better to trade as limited Company or as a Partnersheep. If Partnersheep, is it permited to set up a LLP (Limited Liability Partnersheep) for a Dairy farm? Also, are there any tax advantages with LLP?

    Kamlesh Patel

  112. Kamlesh Patel says:

    Great article.

    Is it correct that the dairy farm business is not tax exempt even though it only sells raw milk (i.e not processed in any way) to Amul.

    If we register it as Limited Company, would it mean we’ll have to pay 30% tax?

    We only have 100 cows, so we’re not a big business.

    I would be very greatful for you response. I look forward to hear from you.


    Kamlesh Patel
    From Gujarat

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