Agriculture Income_Misconceptions

Agriculture income as per income tax law is exempted from income tax. Well the answer is yes and no both. If one has no other income except agriculture income then the answer is yes and the total income will be exempted from paying any income tax on it. But if one has other income like salary, pension, capital gains, interest income, etc then as per the act the agriculture income will be added to the other income and the tax calculated on this total income. From this tax the tax on agriculture income will be deducted to arrive at the final tax payable. What it does is to raise the slab of income tax payable and even though the agriculture income is free from income tax but one ends up paying higher tax on his other income. Your a might go up from 10% to 0 % or from 20% to 30% on your other income.