How to Calculate Tax on Agriculture Income

ZenIT || How to Calculate Tax on Agriculture Income

Calculating Tax on Agriculture Income
Take the sum of the agricultural income and non-agricultural income. The Tax (A) should be computed on this amount.           
Example:
The base tax slab varies according to changes in the Income Tax guidelines.
Add the base tax slab to the agricultural income, then compute another tax (Tax B) on this total.
Deduct (B) from (A) to find the Agricultural Income Tax liability. Agriculture Tax = (A) - (B).
Any available rebate, applicable surcharge, and education cess are added to the final taxable amount.


Let's consider an Individual Assessee with a Total income of Rs 422,700 (excluding Agricultural income) and a Net Agricultural income of Rs 185,000. According to this step, Tax shall be computed on Rs 422,700 + Rs 185,000 = Rs 607,700. Thus, the income Tax amount as per this step shall be Rs 607,700.
Tax at the normal rate
607700 (Total income) – less basic exemption limit Rs (250000)
357700 tax 5% (5% of Rs 5,00,000 less Rs 2,50,000) = 12500
107700   20% (20% of Rs 107700) = 21540
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. 

    • Related Articles

    • Income Tax > Error of Agriculture Income in XML

      XML error regarding agriculture income  Solution  This error comes when you enter agriculture income above 5 lakhs and do not enter land details Go to Transactions > Other Source Income > Agriculture income Enter land detail here  Hope this Helps 
    • Income Tax Auditor manual updation

      If the client is using Spectrum software but wishes to update only the Income Tax Auditor, then: To resolve the error, please follow the steps provided below: Step 1: Navigate to the root location of the software, which can be either "C:\Program ...
    • ZenIT || Calculation of Minimum Alternative Tax (MAT)

      What is MAT: As companies avoided taxes using all possible rebates, the MAT was introduced. MAT is a provision in the IT Act to limit the exemptions and rebates availed by companies. With MAT, companies have to necessarily pay a minimum amount of tax ...
    • Deprecation calculation as per companies act 2013 in Income Tax

      Deprecation calculation as per companies act 2013 Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. The depreciable amount of an asset is the cost of an asset or other amount substituted for cost, ...
    • Tax calculation on long-term capital gains as per section 112A

      Tax Calculation on long-term capital gains as per section 112A Exemption for long-term capital gains arising from transfer of listed securities as referred to in Section 10(38) has been withdrawn by the Finance Act, 2018 w.e.f. Assessment Year ...