- 2 days ago
Category
🦄
CreativityTranscript
00:00In this video we are going to learn about one of the topic from direct taxation please turn on your cc or subtitles from settings for clear understanding let's get started.
00:10Agricultural Income
00:11Let's know about meaning of agriculture
00:14and
00:15Agriculture Purposes
00:18Agriculture means tilling of the land, sowing of the seeds and similar operations.
00:23These are
00:25Basic operations and require the expenditure of human skill and labor on land itself.
00:31However, the term agriculture cannot be extended to all activities which have some distant
00:37relation to land like dairy farming, breeding and rearing of livestock, butter and cheese making
00:43and poultry farming.
00:46Operations to be performed after the produce sprouts from the land which is weeding, digging etc.
00:52Are subsequent operations
00:54These subsequent operations would be
00:57Agricultural operations only when taken in conjunction
01:01With and as a continuation of the basic operations
01:05These subsequent operations would be agricultural
01:09Operations only when taken in conjunction with and as a continuation of the basic
01:14Operations
01:15That is
01:17Basic operations
01:19Are
01:20those operations by agriculturists, which are absolutely necessary for the
01:26purpose of effectively raising produce. From the land are the basic operations.
01:33Income derived from cultivation is agricultural income. Even when income derived is rental.
01:40Income, it should be in the nature of rent for the use of such land for agricultural purposes.
01:46S.C. Growing mulberry leaves, feeding them to silkworms and obtaining silk
01:51cocoons, will not result in agricultural income. Section 2, 1a, which defines the term
01:59Agricultural income, does not contemplate sale of commodity different from what is for market
02:06and not to bring about an altogether new commodity. Income attributable to growing
02:11Mulberry leaves alone shall be treated as agricultural income.
02:17Definition of Agricultural Income Section 2, 1a. Agricultural income may arise in any one of
02:24the following three ways. 1. It may be rent or revenue derived from
02:29lands situated in India and used for agricultural purposes.
02:332. It may be income derived from such land. Through agriculture or
02:403. Through the performance of a process ordinarily employed by a cultivator or receiver of rent.
02:47In kind to render the produce fit to be taken to the market or
02:503. Through the sale of such agricultural produce in the market.
02:553. It may be derived from any farm building required for agricultural operations.
03:00Further, income derived from saplings or seedlings grown in a nursery would be deemed to be
03:07agricultural income, whether or not the basic operations were carried out on land.
03:13Exemption
03:14Section 10, 1, provides that agricultural income is not to be included in the total income of the
03:21Assisi
03:23Taxation of the Agriculture Income
03:26Agriculture Income is totally exempt under the Act, but shall be included in the total income in
03:32case
03:32of certain Assisi for the purpose of determining the rate of tax on the non-agriculture income
03:38known as partial integration of taxes.
03:41It is applicable to
03:43Individuals
03:45Huff
03:46AOP
03:48BOI
03:49And
03:50Artificial Juridical Persons
03:53Two conditions which need to satisfied for partial integration are
03:58First
03:59The net agricultural income should exceed Rs. 5000 p.a
04:05Second
04:06Non-agricultural income should exceed the maximum amount not chargeable to tax.
04:11That is if such person is paying tax under default tax regime under Section 115 BAC, then Rs.
04:193,00,000 is the
04:23Basic exemption limit irrespective of the age of the person.
04:27If such person has exercised the
04:30Option to shift out of the default tax regime, then, the basic exemption limit would be
04:365,00,000
04:403,00,000
04:442,50,000
04:47As the case may be
04:49Only if non-agricultural income exceeds this
04:53Limit, partial integration would be required
04:56It may be noted that aggregation provisions do not apply to company, firm, cooperative society and
05:04Local authority
05:05The object of aggregating the net agricultural income with non-agricultural income is to
05:11Tax the non-agricultural income at higher rates
05:15Tax calculation in such cases is as follows
05:18Step 1
05:20Add non-agricultural income with net agricultural income
05:24Compute tax on the aggregate amount
05:27Step 2
05:28Add net agricultural income and the maximum exemption limit available to the SSC
05:34Compute tax on the aggregate amount
05:37Step 3
05:38Deduct the amount of income tax calculated in Step 2 from the income tax calculated in Step 1
05:45That is Step 1 minus Step 2
05:47Step 4
05:49The sum so arrived at shall be
05:51Increased by surcharge, if applicable
05:55Reduced by the rebate, if any, available under Section 87A
06:00Step 5
06:01Step 5
06:02Thereafter, it would be increased by health and education CES at 4%
06:07It should be noted that in case total income excluding
06:11Long-term capital gain
06:13Short-term capital gain, Section 111A
06:17Casual income
06:19Does not exceeds the maximum exemption limit, partial integration of tax will not be applicable
06:26For clear picture of this concept understanding I have given sample problem in slide do check
06:32it out
06:32Next
06:33Gain arising on transfer of urban agriculture land
06:37The capital gains arising from the transfer of such urban agricultural land would not be treated
06:43as Agricultural income under Section 10 but will be taxable under Section 45
06:49Next
06:51Non-agricultural income
06:53I have listed out income which is not regarded as agricultural income
06:581.
07:00Income from butter and cheese making
07:022.
07:04Commission as a percentage of agriculture
07:06Income
07:083.
07:09Dividend from a company engaged in
07:12Agriculture activity
07:144.
07:16Income from sale of forest trees of
07:18Spontaneous growth
07:205.
07:22Royalties income of mines
07:246.
07:26Income from fisheries, poultry farming, dairy
07:30Farming and animal husbandry
07:327.
07:35Income from supply of water for irrigation
07:37Purposes is not an agriculture income
07:408.
07:42Income from brick making
07:449.
07:46Income from land used for storing agriculture
07:48Produce
07:50For better understanding of the concept, certain examples of agricultural income and non
07:56agricultural income are given below
07:59Instances of agricultural income
08:02The following are some examples of incomes which
08:05Have been held to be agricultural income
08:08Profit on sale of crops after harvest, made by cultivator or receiver of rent in kind
08:15Compensation received from insurance company for damage caused to the crops by hailstorm or
08:21flood
08:22Salary, interest on capital, share of profits, etc., received by a partner of a firm having agricultural
08:31Income
08:33Income from running a dairy which is purely incidental to agriculture
08:37Income from growing flowers and creepers
08:40Income from saplings and seedlings grown in nursery
08:44Instances of non-agricultural income
08:47The following are some examples of incomes
08:50Which have been held to be non-agricultural income
08:54Income from sale of trees, flowers, and fruits growing spontaneously in forests
08:59Profits arising from purchase and sale of standing crops
09:04Remuneration received by a manager as a percentage of profit from a firm having agricultural
09:09Income
09:11Annuity received for transfer of agricultural land
09:15Interest on arrears of rent payable in respect of agricultural land
09:20Interest received by a money lender in the form of crops
09:23Next
09:25Income from composite activity of agriculture and business
09:29Where the agricultural produce like tea, cotton, tobacco, sugarcane etc. are subjected to a
09:37Manufacturing process and the manufactured product is sold, the profit on such sales will consist of
09:44Agricultural income as well as business income
09:47That portion of the profit representing agricultural
09:51Income will be exempted
09:53For this purpose, Rules 7, 7a, 7b and 8 of income tax rules, provides
10:01The basis of apportionment
10:031.
10:05Income from sale of tea grown and
10:07Manufactured by the SSC in India
10:10Amount of
10:12Agricultural
10:13Income
10:1560%
10:1650%
10:17Non-agricultural
10:19Income that is
10:20Business income
10:2240%
10:242.
10:25Income from rubber plants grown by the seller
10:28In India
10:30Amount of
10:32Agricultural
10:33Income
10:3565%
10:37Non-agricultural
10:39Income that is
10:41Business income
10:4235%
10:4525%
10:46Income derived from the sale of coffee grown
10:49Income from the sale of coffee grown
10:50And cured by the seller in India
10:52Amount of
10:53Agricultural
10:55Income
10:5675%
10:58Non-agricultural
11:00Income that is
11:02Business income
11:0425%
11:064. Income derived from the sale of coffee grown
11:10Cured
11:11Cured, roasted and grounded by the seller in
11:14India
11:15Amount of
11:17Agricultural
11:18Income
11:2060%
11:21Non-agricultural
11:23Income that is
11:25Business income
11:2740%
11:2850%
11:29Rule 7
11:31Agricultural
11:32Produce other than tea, rubber etc.
11:35Used as raw
11:35Material in a manufacturing concern
11:39Where income is partially agricultural income and partially income chargeable to income
11:44tax under the
11:45Head profits and gains of business, the market value of any agricultural produce which
11:51has been
11:51Raised by the assessi or received by him as rent in kind and which has been utilized as raw material in
11:58Such business or the sale receipts of which are included in the accounts of the business shall be
12:04Deducted
12:05No further deduction shall be made in respect of any expenditure incurred by the
12:10Assessi as a cultivator or receiver of rent in kind
12:14Rule 7a
12:16Income from the growing and manufacturing of rubber in India
12:20This rule is applicable when income derived from the sale of latex or cenex or latex-based
12:26crepes or
12:26Brown crepes manufactured from field latex or coagulum obtained from rubber plants grown
12:32By the seller in India
12:35Income derived from the sale of rubber obtained from rubber plants grown in India shall be
12:40Computed as under
12:42Step 1
12:43Compute the income under the Head of Profits and Gains of Business or Profession after
12:49Allowing Deduction under Section 33 of
12:51Step 2
12:53Computation of Agriculture and Non-Agriculture Income in the following manner
12:5835% of such income is liable to tax
13:0265% balance of such income is exempt from tax
13:07I have given an example problem for clear understanding
13:11Take a look
13:13Rule 7b
13:14Rule 7b
13:14Income from the growing and manufacturing of coffee in India
13:19Income derived from the sale of coffee grown and cured in India shall be computed as
13:24Under
13:25Step 1
13:27Compute the income under Head Profits and Gains of Business or Profession after allowing Deduction under Section 33 of
13:34Step 2
13:35Step 2
13:35Step 2
13:36Step 2
13:36Step 2
13:36Step 2
13:37Computation of Agriculture and Non-Agriculture Income in the following manner
13:4125% of such income is liable to tax
13:4575% balance of such income is exempt from tax
13:51Income derived from the sale of coffee grown, cured, roasted and grounded in
13:56India shall be computed as under
13:59Step 1
14:00Compute the income under Head PGBP after allowing Deduction under Section 33 of
14:06Step 2
14:08Computation of Agriculture and Non-Agriculture Income in the following manners
14:1340% of such income is liable to tax
14:1760% balance of such income is exempt from tax
14:23Rule 8
14:25Income from the growing and manufacturing of tea in India
14:29This rule applies only in cases where the SSC himself grows tea leaves and manufactures tea in
14:35India
14:36Income derived from the sale of tea grown and manufactured in India shall computed as
14:42Under
14:43Step 1
14:45Compute the income under Head PGBP after allowing Deduction under Section 33 of
14:51Step 2
14:52Computation of Agriculture and Non-Agriculture Income in the following manners
14:5740% of such income is liable to tax as business income under the Head profits and gains of
15:04business or profession
15:0560% balance of such income is exempt from tax
15:10Let's see some most frequently asked questions in this topic
15:14Income from nursery constitutes agricultural income according to Section 2
15:201a Income derived from saplings or seedlings grown in a
15:24Nursery would be deemed to be agricultural income, whether or not the basic operations were carried
15:30Out on land
15:32Lastly
15:33Income from farm building
15:36Income from the farm building which is owned and occupied by the receiver of
15:40The rent or revenue of any such land or occupied by the cultivator or the receiver of rent in
15:46kind, of any land
15:48With respect to which, or the produce of which, any process discussed above is carried on, would be
15:55Agricultural income
15:57However, the income arising from the use of such farm building for any purpose, including
16:04Letting for
16:04Residential purpose or for the purpose of business or profession, other than agriculture would
16:10not be agricultural income
16:12Further, the income from such farm building would be agricultural income only if the following
16:18conditions
16:19Are satisfied
16:21The building should be on or in the immediate vicinity of the land, and
16:25The receiver of the rent or revenue or the cultivator or the receiver of rent in kind
16:31should, by reason
16:32Of his connection with such land require it as a dwelling house or as a storehouse
16:37In addition to the above conditions any one of the following two conditions should also
16:42be satisfied
16:43Point A
16:45The land should either be assessed to land revenue in India or be subject to a local rate
16:50Assessed and collected by the officers of the government as such or
16:55Point B
16:56Where the land is not so assessed to land revenue in India or is not subject to local rate
17:02It should not be situated in any area as comprised within the jurisdiction of a municipality or
17:08A cantonment board and which has a population not less than 10,000 or
17:13It should not be situated in any area within such distance, measured aerially
17:18In relation to the
17:20Range of population as shown here in slide
17:24Shortest aerial distance from the
17:26Local limits of a municipality or
17:29Cantonment board referred to in item
17:32Less than 2 km
17:34Population according to the last
17:37Preceding census of which the relevant
17:40Figures have been published before the
17:43First day of the previous year
17:45Less than 10,000
17:48More than 2 km but less than 6 km
17:51Population according to the last
17:54Preceding census of which the relevant
17:57Figures have been published before the
18:00First day of the previous year
18:03Less than 1,00,000
18:06More than 6 km
Recommended
1:34
|
Up next
1:06
0:59
1:02
1:07
7:38
3:23
3:23
0:29
39:01
27:44
57:05
32:53
30:33
45:46
1:23:56
Be the first to comment