Steps of Partial Integration

Last updated at Dec. 13, 2024 by Teachoo

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.

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

Tax payable because of Agricultural Income=10300

Tax payable if there was no Agricultural Income

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

-ea-