EARNED AGRICULTURE INCOME- NO NEED TO PAY ANY TAX

EARNED AGRICULTURE INCOME- NO NEED TO PAY ANY TAX

AGRICULTURE IS THE PRIMARY SECTOR OF INDIA, IN ORDER TO ENCOURAGE THIS SECTOR THE GOVERNMENT HAS GIVEN INCENTIVE TO THE ASSESSEE WHO DERIVED INCOME FROM THE AGRICULTURAL ACTIVITIES IN INDIA.

BUT FIRSTLY IT IS IMPORTANT TO KNOW WHAT INCLUDES IN THE AGRICULTURE ACTIVITIES:-

1. ANY RENT EARNED FROM THE LAND SITUATED IN INDIA AND THAT LAND USED FOR AGRICULTURAL PURPOSES i.e. FOR FARMING etc.
2. ANY INCOME DERIVED FROM SUCH LAND BY AGRICULTURE OR THE SALE OF THE PRODUCE RAISED OR RECEIVED AS RENT IN KIND.
3. ANY INCOME DERIVED FROM THE SAPLING OR SEEDLINGS (A YOUNG PLANT RAISED FROM A SEED) GROWN IN  NURSERY SHALL BE DEEMED TO BE AGRICULTURE INCOME.
4. ANY INCOME DERIVED FROM ANY BUILDING OCCUPIED BY CULTIVATOR ( i.e. BY FARMER) AND THAT BUILDING MUST BE IMMEDIATE VICINITY i.e. NEARBY, THE LAND USED FOR AGRICULTURE AND THAT BUILDING WHICH IS SO PROVIDED TO FARMER IS USED BY HIM AS DWELLING HOUSE OR AS A STORE HOUSE.

IF ANY INCOME EARNED BY ASSESSEE WHICH IS SAID TO BE AGRICULTURE ACTIVITIES AS DISCUSSED ABOVE IS NOT TAXABLE IN THE HANDS OF ASSESSEE.

FROM THE INVESTMENT POINT OF VIEW, THE INVESTOR MAY INVEST HIS SURPLUS MONEY IN AGRICULTURAL ACTIVITIES. HE MAY PURCHASE A LAND WHICH HE MAY LEND IT TO THE FARMER AND CAN EARN RENT OR HE MAY ALSO LEND TO THE FARMER WHICH HE MAY USED IT AS FOR THE PURPOSE AS DISCUSSED ABOVE. THE INCOME EARNED BY ASSESSEE IS NOT TAXABLE AS PER SECTION 2(1A) OF INCOME TAX ACT, 1961

IN CASE THE ASSESSEE SOLD ANY ASSET LIKE HOUSE PROPERTY, BUILDING, JEWELLERY OR ANY CAPITAL ASSET DURING THE YEAR AND HE WANTS TO SAVE TAX, HE CAN INVEST HIS CAPITAL GAIN SO EARNED FOR THE PURCHASE OF AGRICULTURE LAND; HIS CAPITAL GAIN SO INVESTED FOR THE PURCHASE OF AGRICULTURE LAND IS EXEMPT FROM THE TAX.

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