How to Calculate Tax on 'AGRICULTURAL INCOME'
CALCULATING TAX ON AGRICULTURAL INCOME
- Take the sum of the agricultural income and non-agricultural
income. The tax (A) should be computed on this amount.
- The base tax slab changes as per the change in Income Tax guidelines.
- Add the base tax slab to the agricultural income. Another Tax (B) needs to be computed on this sum.
- Deduct (B) from (A). That will be the Agricultural Income Tax liability. Agriculture Tax = (A) – (B)
- Any available rebate, applicable surcharge and education cess are added too to the final taxable amount.
Let us say that an
Individual Assessee has a Total income of INR 422700/- (excluding Agricultural
income) and a Net Agricultural income of INR 185000/-. Then, per this step, Tax
shall be computed on INR 422700/- + INR 185000/- = INR 607700/-. Thus, income Tax amount as per this step shall
be INR 607700/-
Tax at normal rate
607700 (Total income) – less basic exemption limit Rs
357700 tax 5% (5% of Rs
5,00,000 less Rs 2,50,000) = 12500
107700 20% (20% of Rs 107700)
Total Tax = 34040
Tax on agriculture income –
185000 ( 5% of Rs 185000) = 9250
Total tax = 34040
Tax rebate on agriculture income = 9250
Tax rebate 87a = 12500
Tax payable = 12290
Hope this Helps.
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