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.
View AnswerPartial 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 |
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Example 2
What is the excess tax paid because of agricultural Income
View AnswerTax 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
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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 |
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