Any Rent or revenue derived from land situated in India and used for agricultural purpose is Agricultural Income
All the following conditions must be satisfied
- Rent or Revenue Income Earned in cash or kind
- Income is earned from Land and not other assets
- Land must be situated in India
- Land must be used for Agricultural Operations by tenant
WHETHER RENT/REVENUE AGRICULTURAL INCOME?
Question
State whether Agricultural income Exempt
Q1
Mr A owns an agricultural land in India. He gives it on Rent to B @10000 pm. Mr B uses the land for agricultural purpose?
View answer
Exempt as all 3 conditions satisfied
- Land must be situated in India .
- It must be used for agricultural purpose .
- Rent is Received from Land
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Q2
Suppose in Q1 ,Mr B use the land for running a restaurant(Dhaba )
View answer
Taxable as it is not used by B for agricultural purpose
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Q3. Suppose in q1, Mr A owns an agricultural land in USA. .He gives it on Rent to B @10000 pm.Mr B uses the land for agricultural purpose?
View answer
Taxable as land is situated outside India
Q4
Mr A owns an agricultural land in India. He gives it to B for use in agricultural purpose
He does not get any rent but gets half the produce as gift
View answer
Exempt as Rent/Revenue in both cash/kind covered
Q5
Mr A owns a tractor He gives it to B for use in agricultural purpose @ rent of 5000 pm
View answer
Rent is not derived from land but from tractor
Hence, It is taxable as it is not used for agricultural income.