Income Tax Rules for Farmers: India is an agricultural country, where crores of people earn their livelihood from farming. But when it comes to tax, the question often arises whether farmers also have to pay income tax on their earnings ? Many people believe that income from farming is completely tax free, whereas in some cases farmers may also have to pay tax.
In such a situation, it becomes very important to know what rules the government has made regarding tax for farmers, and under what circumstances they may have to pay tax.
Agricultural income is kept tax free under Section 10(1) of the Income Tax Act 1961 of the Government of India. This means that if a person earns only from farming , such as by selling crops, vegetables or grains from the farm, then he does not have to pay income tax. This exemption has been given because farming is considered risky and weather dependent.
When may I have to pay tax?
However, complete tax exemption is not available in every situation. If the farmer ‘s income comes from any source other than farming, such as dairy, poultry, business or rental income, then that portion may be taxed. Example:
If a farmer sells agricultural land located in the city, capital gains tax may be levied on it. If farming is being run as a business (such as contract farming or processing unit), then that income will be considered business income. If the farmer’s non-agricultural income is more than ₹ 2.5 lakh annually, then he may have to file Income Tax Return (ITR). However, if the entire income is from farming only and there is no other source, then it is not necessary to file ITR.
We have taken all measures to ensure that the information provided in this article and on our social media platform is credible, verified and sourced from other Big media Houses. For any feedback or complaint, reach out to us at businessleaguein@gmail.com
Add businessleague.in as a Preferred Source
