Steps of Partial Integration

Step 1 Calculate Total Income [ Agriculture & Non Agricultural ]

Step 2 Calculate tax on total Income

Step 3 Calculate Agriculture Income  +  Maximum Exemption Limit.

Step 4 Calculate Tax .

Step 5  Calculate Difference in tax [Step 2 − Step 4]

Step 6 Reduce Rebate (if any)

Step 7 Add Education Cess @ 3 %

Step 8 Calculate Tax+ Cess

 

Practical of Partial Integration

Example 1

Mr. A is an Resident Individual of Age 50, having Income from Agriculture

Worth Rs.400000 and other Business Income of Rs.300000. Calculate his Income Tax liability as per Income tax Act, 1961.

-a-

Partial Integration is applicable as

Agricultural Income >5000

And

Non Agriculural Income >250000

 

Particulars

Amount

Agricultural Income

400000

 + Non  Agricultural Income

300000

Total Income [ Agriculture & Non Agricultural ]

700000

Tax on Total Income

65000

(700000-500000)*20%+25000

 

 

 

Total of [Agricultural Income + Maximum Exemptions Limit] (400000+250000)

650000

 

 

Tax on above

 

(650000-500000)*20%+25000

55000

 

 

Diff in Tax

10000

Less

 

Rebate

0

Net Tax

10000

Add

 

Cess @3%

300

Total Tax

10300

-ea- 

Example 2

What is the excess tax paid because of agricultural Income

-a-

Tax payable because of Agricultural Income=10300

 

Tax payable if there was no Agricultural Income

Agricultural Income

Amount

 Non  Agricultural Income

300000

Total Income

300000

Tax (300000-25000)

5000

Less :

 

Rebate                                    

2000

Net Tax

3000

Add:

 

Cess                                        

90

Tax  +  Cess

3090

 

Hence excess tax paid because of partial integration=10300-3090=Rs.7210

-ea-                                                                                                           

 

Example 3

Solve example 1. assuming Agricultural Income = 4000 and Non Agricultural = 300000

-a- 

There is no partial Integrations as Agricultural Income does not exceed 5000

  Hence tax is calculated same as in example 2

Agricultural Income (Exempt)

Amount

Non  Agricultural Income

300000

Total Income

300000

Tax (300000-25000)

5000

Less :

 

Rebate                                    

2000

Net Tax

3000

Add:

 

Cess                                        

90

Tax  +  Cess

3090

 -ea- 

  1. Income Tax
  2. Agricultural Income
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About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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