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Q. What is Agriculture Income?
Section 2(1A)
•Any rent or revenue derived from land
•Any income derived from such land by
agriculture or from processing of
agriculture produce
•Any income from farm building i.e. farm
house
Explanation 3 : Any Income from sampling or seedlings grown in NURSERY
shall be deemed to be a agriculture.
RENT OR REVENUE DERIVED FROM LAND
Rent Rent should be the payment made in
Cash or
Kind or
Money or
Money’s worth.
By one person to another In respect of a grant of a right to use
land.
Revenue Any revenue means
Rent
Income which falls under section 2(1A) (b) and (c).
If the immediate and effective sources is not land, the income cannot be considered to be agriculture income.
Dividend: from a company carrying agriculture activities?
Questions: Agriculture income or not
Loan obtained by the shareholders out of accumulated profits of a
company carrying agriculture operations?
Interest on arrears of cess or rent payable by the tenant to his land lord?
Commission earned by the broker on selling agriculture produce of n agriculturist?
Salami or Nazrana paid?
Any income derived from such land by agriculture operations
Operations include:1. Processing of agricultural produced
2. Raised or received as rent in kind
So as to render it for market, or Sale of such produce.
Three instances of agriculture income :
Standing
Crop
Raw
Produce
after
harvest
Sold by
agriculturist
himself
1. (i)
(ii) Crop used as raw material by the cultivator in his business.
2. PROCESS EMPLOYED ON PRODUCE TO MAKE IT FIT FOR MARKET.
The gain in the value of the produce, by such Marketing Process or Agriculture Process, is also
classified as AGRICULTURE INCOME.
3. Income From Farm House
Subject To Certain Conditions :
1. Building- Where it should be situated ?
On or Immediate Vicinity Of Land.
Land situated in India and used for agriculture purpose.
2. It is occupied BY Cultivator or Receiver of rent or revenue.
3. It is used as:
a) Dwelling House
b) Store House
4. It should be assessed to land revenue or local rate.
Note: If not assessed to local rate or land revenue, then land should be situated in Rural Area.
Agriculture Income Includes:
Income From Toddy
If, Actual Cultivator of the trees
receives income.
Income From Rubber
If, owner himself performs
slaughter tapping.
Agriculture Income Includes:
LEASE RENT FROM COCONUT
GARDENLease Rent From land leased out for
grazing cattle.
If, lessee pays rent and takes coconut during the term of leaseDeliver possession of the coconut garden to lessor at the term end.
If , lease out for grazing of
cattle for agriculture pursuit.
Agriculture Income Includes:
Sale of Grass Sale from flowers & creepers
If, grass is grown by human
effort.
All basic operations would
have been performed
If, Income is from GROWING flowers & creepers.
Agriculture Income Includes:
Insurance Compensation
On account of damaged caused
to the crops
Sale of seeds
Derived on account of cultivation
by the assesse is an agriculture
income.
NON- AGRICULTURE INCOME
Income From
Sale of forest, trees etc. grown without
human effort
salt produced by flooding the land with sea water & extracting thereon
Stone QuarriesBreeding of
livestock
Dairy farming, butter & cheese
Poultry FarmingFisheries / Royalty
of MinesPreserved Potatoes
Brick MakingSupplying surplus
water to agriculturist
Interest on arrears on rent
Rent for Land/ godowns for storing
crops