Agriculture Income

Solution 1
Computation of Tax Liability Under Default Regime
Particulars Amount Amount
PGBP 9,00,000
LTCG 112 3,00,000
STCG 111A 50,000
Lottery Income 40,000
Gross Total Income 12,90,000
Deductions u/s 80C – 80 U -
Total Income 12,90,000
Computation Of Tax
Step :1 Addition of Non Agriculture Income with Net
Agriculture Income
Non Agriculture Income 12,90,000
Add: Net Agriculture Income 1,50,000
Total Amount 14,40,000
Tax On Normal Income 10,50,000 @ Slab rate
Upto Rs 3 lakh NIL 0
Next Rs 3 lakh 5% 15,000
Next Rs 3 lakh 10% 30,000
Balance Rs. 1.50 Lakhs 20% 30,000
Tax On LTCG 112 Rs 3 Lakhs 20% 60,000
Tax On STCG 111A Rs 50,000 15% 7,500
Tax On Lottery Rs 40,000 30% 12,000
Income Tax calculated under Step 1 1,54,500
Step :2 Addition of Non Agriculture Income with Basic
Exemption Limit
Net Agriculture Income 1,50,000
Add: Basic Exemption Limit 3,00,000
Total 4,50,000
Upto Rs 3 lakh NIL 0
Next Rs 1.50 lakh 5% 7,500
Income Tax calculated under Step 2 7,500
Step :3 Difference between the tax calculated under both
above steps
Income Tax calculated under Step 1 1,54,500
Less : Income Tax calculated under Step 2 7,500
 Balance Income Tax 1,47,000
Add : HEC @ 4% 5,880
NET TAX LIABILITY 1,52,880

Computation of Tax Liability Under Normal Regime

Particulars Amount Amount
PGBP 9,00,000
LTCG 112 3,00,000
STCG 111A 50,000
Lottery Income 40,000
Gross Total Income 12,90,000
Deductions u/s 80C – 80 U 1,00,000
Total Income 11,90,000
Computation Of Tax Tax Rate Amount
Step :1 Addition of Non Agriculture Income with Net
Agriculture Income
Non Agriculture Income 11,90,000
Add: Net Agriculture Income 1,50,000
Total Amount 13,40,000
Tax On Normal Income 9,50,000 @ Slab rate
Upto Rs 2.5 lakh NIL 0
Next Rs 2.5 lakh 5% 12,500
Next Rs 4.50 lakh 20% 90,000
Tax On LTCG 112 Rs 3 Lakhs 20% 60,000
Tax On STCG 111A Rs 50,000 15% 7,500
Tax On Lottery Rs 40,000 30% 12,000
Income Tax calculated under Step 1 1,82,000
Step :2 Addition of Non Agriculture Income with Basic
Exemption Limit
Net Agriculture Income 1,50,000
Add: Basic Exemption Limit 2,50,000
Total 4,00,000
Upto Rs 2.5 lakh NIL 0
Next Rs 1.50 lakh 5% 7,500
Income Tax calculated under Step 2 7,500
Step :3 Difference between the tax calculated under both
above steps
Income Tax calculated under Step 1 1,82,000
Less : Income Tax calculated under Step 2 7,500
Balance Income Tax 1,74,500
Add : HEC @ 4% 6,980
NET TAX LIABILITY 1,81,480
Solution 2 : Computation of Tax Liability of Mr X - Resident age 45 years under
Default Tax Regime u/s 115BAC
Particulars
Amount Amount
Income from Salary 3,40,000
Income from House Property 3,00,000
Net Agriculture Income ( Rs 1,80,000-1,20,000) 60,000
Less : Exempt u/s 10(1) (60,000) NIL
Gross Total Income 6,40,000
Less : Deductions u/s 80 C to 80 U NIL
Total Income 6,40,000

Particulars Tax Rate Amount

Step :1 Addition of Non Agriculture Income with Net
Agriculture Income
Non Agriculture Income 6,40,000
Add: Net Agriculture Income 60,000
Total Amount 7,00,000
Upto Rs 3 lakh NIL 0
Next Rs 3 lakh 5% 15,000
Next Rs 3 lakh ie Rs 1 lakh 10% 10,000
Income Tax calculated under Step 1 25,000
Step :2 Addition of Non Agriculture Income with Basic
Exemption Limit
Net Agriculture Income 60,000
Add: Basic Exemption Limit 3,00,000
Total 3,60,000
Upto Rs 3 lakh NIL 0
Next Rs 3 lakh ie Rs 60,000 5% 3,000
Income Tax calculated under Step 2 3,000
Step :3 Difference between the tax calculated under both
above steps
Income Tax calculated under Step 1 25,000
Less : Income Tax calculated under Step 2 3,000
Balance Income Tax 22,000
Less : Rebate u/s 87 A
a) 100% of tax payable or 22,000
b) Rs 25,000 whichever is lower
NIL
Add : HEC @ 4% NIL
NET TAX LIABILITY NIL
Computation of Tax Liability of Mr X - Resident age 45 years under Normal Tax Provisions
Particulars Amount Amount
Income from Salary 3,40,000
Income from House Property 3,00,000
Net Agriculture Income ( Rs 1,80,000-1,20,000) 60,000
Less : Exempt u/s 10(1) (60,000) NIL
Gross Total Income 6,40,000
Less : Deductions u/s 80 C to 80 U NIL
Total Income 6,40,000

Particulars Tax Rate Amount

Step :1 Addition of Non Agriculture Income with Net
Agriculture Income
Non Agriculture Income 6,40,000
Add: Net Agriculture Income 60,000
Total Amount 7,00,000
Upto Rs 2,50,000 ( Basic Exemption Limit ) NIL 0
Above Rs 2,50,000 lakh upto Rs 5 Lakh 5% 12,500
Above Rs 5 Lakh upto Rs 10 Lakh ie balance Rs 2,00,000 20% 40,000
Tax Liability 52,500
Step :2 Addition of Net Agriculture Income with Basic
Exemption Limit
Net Agriculture Income 60,000
Add: Basic Exemption Limit 2,50,000
Total 3,10,000
Upto Rs 2.50 lakh ( Basic Exemption Limit ) NIL
0
Above Rs 2.50 lakh upto Rs 5 Lakh on Rs 60,000 5% 3,000
Income Tax calculated under Step 2 3,000
Step :3 Difference between the tax calculated under both
above steps
Income Tax calculated under Step 1 52,500
Less : Income Tax calculated under Step 2 3,000
Balance Income Tax 49,500
Tax Liability 49,500
Less : Rebate u/s 87 A NIL
49,500
Add : HEC @ 4% 1,980
NET TAX LIABILITY 51,480
Computation of Tax Liability of Mr X - Resident age 70 years under Default Tax Regime
u/s 115BAC
Particulars
Amount Amount
Income from Salary 3,40,000
Income from House Property 3,00,000
Net Agriculture Income ( Rs 1,80,000-1,20,000) 60,000
Less : Exempt u/s 10(1) (60,000) NIL
Gross Total Income 6,40,000
Less : Deductions u/s 80 C to 80 U NIL
Total Income 6,40,000

Particulars Tax Rate Amount

Step :1 Addition of Non Agriculture Income with Net
Agriculture Income
Non Agriculture Income 6,40,000
Add: Net Agriculture Income 60,000
Total Amount 7,00,000
Upto Rs 3 lakh NIL 0
Next Rs 3 lakh 5% 15,000
Next Rs 3 lakh ie Rs 1 lakh 10% 10,000
Income Tax calculated under Step 1 25,000
Step :2 Addition of Non Agriculture Income with Basic
Exemption Limit
Net Agriculture Income 60,000
Add: Basic Exemption Limit 3,00,000
Total 3,60,000
Upto Rs 3 lakh NIL 0
Next Rs 3 lakh ie Rs 60,000 5% 3,000
Income Tax calculated under Step 2 3,000
Step :3 Difference between the tax calculated under both
above steps
Income Tax calculated under Step 1 25,000
Less : Income Tax calculated under Step 2 3,000
Balance Tax Liability 22,000
Less : Rebate u/s 87 A
a) 100% of tax payable or 22,000
b) Rs 25,000 whichever is lower
Tax Before Cess NIL
Add : HEC @ 4% NIL
NET TAX LIABILITY NIL
Computation of Tax Liability of Mr X - Resident age 70 years under Normal Tax Provisions
Particulars
Amount Amount
Income from Salary 3,40,000
Income from House Property 3,00,000
Net Agriculture Income ( Rs 1,80,000-1,20,000) 60,000
Less : Exempt u/s 10(1) (60,000) NIL
Gross Total Income 6,40,000
Less : Deductions u/s 80 C to 80 U NIL
Total Income 6,40,000

Step :1 Addition of Non Agriculture Income with Net

Agriculture Income
Non Agriculture Income 6,40,000
Add: Net Agriculture Income 60,000
Total Amount 7,00,000
Upto Rs 3 Lakh ( Basic Exemption Limit ) NIL 0
Above Rs 3 lakh upto Rs 5 Lakh 5% 10,000
Above Rs 5 Lakh upto Rs 10 Lakh ie balance Rs 2 lakh 20% 40,000
Tax Liability 50,000
Step :2 Addition of Net Agriculture Income with Basic
Exemption Limit
Net Agriculture Income 60,000
Add: Basic Exemption Limit 3,00,000
Total 3,60,000
Upto Rs 3 lakh ( Basic Exemption Limit ) NIL 0
Above Rs 3 lakh upto Rs 5 Lakh on Rs 60,000 5% 3,000
Income Tax calculated under Step 2 3,000
Step :3 Difference between the tax calculated under both
above steps
Income Tax calculated under Step 1 50,000
Less : Income Tax calculated under Step 2 3,000
Balance Income Tax 47,000
Less : Rebate u/s 87 A NIL
47,000
Add : HEC @ 4% 1,880
NET TAX LIABILITY 48,880
3 : Computation of Business Income & Agriculture Income of Mr B
Particulars Business Agriculture Agriculture
Income Income Income
Sale of Sugar
Business Income
Sale proceeds of sugar 25,00,000
Less : Market Value of Sugar cane (70% ) 22,00,000
Less: Manufacturing Expense 1,50,000
Total Business Income 1,50,000

Agriculture Income
Market Value of Sugarcane (70% ) 22,00,000
Less : Cost of Cultivation 14,00,000
Agriculture Income 8,00,000

Sale of Sugar
Agriculture Income
Sale Proceeds of Sugar cane (30%) 10,00,000
Less: Cost of Cultivation 5,00,000
Agriculture Income 5,00,000
Total Agriculture Income 13,00,000

Solution 4 : Computation of Total Income of Mr C

Particulars Total Agriculture Business

Income Income Income

Sale of Rubber 30,00,000

Less : Cost of Cultivation 10,00,000
Less: Manufacturing Expense 8,00,000
Total Income 12,00,000
Agriculture Income 7,80,000
65% of Total Profit Rs 12 lakhs
Business Income 4,20,000
35 % of Total Income Rs 12 lakh
Total 12,00,000 7,80,000 4,20,000