Agriculture Income and its Taxability under Income Tax Act

    Defining Capital Gains The rise in the value of a capital asset at the time of its sale is referred to by the term capital gain. Simply put, capital gain arises during the time of sale of an asset where the seller receives more money than what they originally paid for it. Almost all forms of assets owned can be classified as capital assets which include but aren’t limited to certain kinds of investments (like real estate or stocks) and assets purchased for personal use (like furniture or a vehicle). By subtracting the original price at which an asset was purchased for from the price at which you choose to sell it, you can calculate the capital gains you earned. Exploring the Realm of Capital Gains The increase in the value of an asset is represented via capital gains which are ordinarily realized at the time at which an asset is sold. Capital gains are ordinarily tethered to investments like funds and stocks owing to their characteristic price volatility. However, this isn...

    Agricultural Income Tax Treatment / Taxability Agricultural income is not subject to income tax. The Income-tax Act has, however, specified how such income is to be indirectly taxed. This is called the partial integration of agricultural and non-agricultural income.  Agricultural income is not taxable under Section 10 (1) of the Income Tax Act as it is not counted as a part of an individual's total income. However, the state government can levy tax on agricultural income if the amount exceeds Rs.5,000 per year. It is categorised as a valid source of income and basically includes income from sources that comprise agricultural land, buildings on or related to an agricultural land and commercial produce from agricultural land. This income is considered for rate purposes while calculating the  income tax  liability of an individual. Union Budget 2023-24 Highlights Here are the Union Budget 2023-24 highlights with respect to the agricultural sector: App...

  Income under this head is chargeable under Section 56 of The Income Tax Act, 1961. The residuary head of income assessment under the income tax in India that the incomes not assessed under any other head are assessable under this head.  However, the following are a few assessable incomes under this head. Dividend Income When a part of the company’s accumulated profits is distributed to the shareholder, it is called a dividend. Dividend income from shares is taxable in India, and it could be a dividend from an Indian company or a foreign company having its business in India. Such distribution could be a result of parting with accumulated profits. Dividend Incomes are usually subject to TDS@10%. However, no TDS is required to be deducted if the dividend income does not exceed ₹5000. Any interest expense incurred to earn such a dividend is allowed as a deduction subject to the maximum of 20% of such income. However, the incidence of Surcharge on dividend income shall not exceed...

    What are Perquisites in Income Tax? Perquisites in   Income Tax   are any excess benefit or advantage given to an employee by their employer in addition to the basic wages or salaries. These benefits usually form a part of the total cost to the company (CTC) and the pay structure of every employee. However, a prerequisite does not include a simple reimbursement of any expense made by the employee on behalf of the employer. Since, salary income forms a part of the total income of every taxpayer, the valuation of perquisites in Income Tax is given utmost importance. In this matter, the Income Tax act is clear in terms of its taxability and valuation.  The following is an inclusive list under the definition of perquisites in Income Tax.  The amount of rent free accommodation received by an employee from the employer Value of any concession in the matter of rent respecting any accommodation provided to the assessee by his employer.  Amount paid by the ...

    Introduction The Income Tax Act, 1961 (hereinafter, Act), places the income earned from business and profession under the head of “Profits and Gains from Business and Profession”. The income categorized under this head includes the profits earned from said business or profession, along with the compensations and incentives directly connected to the business of professional activity. However, running a business or being a professional also calls for incurring certain expenditures, such as rent for an office, repairs, and maintenance of machinery, expenditure on research and development, and so on. Such expenses of business and profession are deducted from the profits earned in order to arrive at taxable income. This is done so that only the true income earned from a business or profession is taxed, without taxing the expenditures involved in running said business or profession. I Types of business expenses Business expenses are those which are incurred in running the day-to...