The Income Tax Department has clarified that the cash sales of agricultural produce by a cultivator to a trader for less than.....will not attract tax under the Income Tax Act.

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

The Income Tax Department has clarified that the cash sales of agricultural produce by a cultivator to a trader for less than____will not attract tax under the Income Tax Act.

A	5 lakh rupees
B	2 lakh rupees
C	4 lakh rupees
D	3 lakh rupees

Explanation:

Detailed explanation-1: -Therefore, any cash sale of an amount of Rs. 2 lakh or more by a cultivator of agricultural produce is prohibited under section 269ST.

Detailed explanation-2: -However, as per section 10(37), no capital gain would be chargeable to tax in case of an individual or HUF if agricultural land is compulsorily acquired under any law and the consideration of which is approved by the Central Government or RBI and received on or after 01-04-2004.

Detailed explanation-3: -Agricultural income is not taxable under Section 10 (1) of the Income Tax Act as it is not counted as a part of an individual’s total income. However, the state government can levy tax on agricultural income if the amount exceeds Rs. 5, 000 per year.

Detailed explanation-4: -Since this is not a capital asset for capital gains purposes, any profits made on sale/transfer of it is also not an income under the income tax laws and therefore is not required to be disclosed in the ITR anywhere.

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