## Monday, June 25, 2012

### Income Tax on Agricultrual Income

Friends

Agricultural income is exempt from income tax. But slab tax effects the income tax as and when an assesses has Other income alongwith agricultural income.

How to calculate Income Tax having agricultural income + other income
As we know that our income tax slab is 10%,20% and 30%
For calculating income tax having agricultural income initially we have to calculate income tax on other income+ agricultural income, and then threshold limit of income tax+ agricultural income. Example in detail is given as under :-

Example :-
Your other income is Rs. 7,00,000.00
Your Agricultrual Income is Rs. 1,25,000.00
Individual Status is Women

Calculation Method for Assessment Year 2010-11:-
a) Calculate Income Tax on Rs. 8,25,000 (7,00,000+1,25,000) = (Other income+Agricultural income)
b) Calculate Income Tax on Rs. 3,15,000 (1,90,000+1,25,000) = (Threshold limit+ Agricultural income)
Threshold Limits of Income Tax are given as under :-
Senior Citizen = 2,40,0000
Women (Not Senior Citizen) = 1,90,000
Man(HUF, Trust etc.) =1,60,000
Income Tax in above example will be as under : -
on Rs. 8,25,000 (7,00,000+1,25,000) = 1,48,500.00 (excluding cess)
on Rs. 3,15,000 (1,90,000+1,25,000) = 14,000.00 (excluding cess)
on Rs. 7,00,000 (other income) = = 1,11,000.00 (excluding cess)

Now, you have to pay income tax Rs. 1,48,500- 14,000 = 1,34,500=00

Extra tax due to Agricultural Income is Rs. 23,500 (134500-111000)