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
(1) Calculate Tax on: Non Agriculture income + Net Agriculture Income:

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:
(2) Calculate Tax on: Net Agriculture Income + Maximum Exemption limit as per Slab Rate:

185000 ( 5% of Rs 185000) = 9250
Quote
Tax rebate on agriculture income = 9250

(3) Calculate Final Tax  (1) - (2) as above 
Total Tax (1) - (2) = 34040 - 9250
Gross Tax Amount = 24790
Tax rebate 87a = 12500
Tax payable =  12290

Hope this Helps. 

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