PARTLY AGRICULTURAL INCOME

Partly agricultural income consists of both the element of agriculture and business, so non agricultural part of the income is taxed. Eg:- Mr. X cultivating sugar cane at the same time he has a sugar mill for making sugar by using his own sugar cane
Rule no. 7 and 8 of the income tax act of 1961 regarding to partly agricultural income. They are,

1Profit of business other than Tea –Rule.7

This rule applicable to agricultural produce like cotton, tobacco, and sugarcane etc, here the market vale of the agricultural produce raised by the Assessee for utilizing it as raw material for his business will be deducted out of the total profit of such Assessee while calculating tax on his income.

2. Profit from Tea manufacturing Rule.8

If a person using his own tealeaves grown by him for his tea manufacturing business, then 60 % of his income will be treated as agricultural income and the remaining 40 % will be treated as business income so he has to pay tax on that remaining part of income.

3. Income from the manufacturing of centrifuged latex or cenex

If a person manufacturing centrifuged latex by using his own made raw material the,65 % of the income derived from the sale of the same is treated as agricultural income so he has to pay tax remaining part of the income.

4. Income from the coffee manufacturing

Same as the above mentioned, 75% of the income from the sale of coffee grown and cured by the seller in India is deemed to be a agricultural income.


While calculating tax on partly agriculture income, income totaled as business income. Besides they will get allowances for plating new plants for the damaged ones but if they received any subsidy from coffee board or tea board , no deduction shall be allowed.