GK
TAXES IN INDIA
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Market value of the agricultural produce minus expenses on cultivation of such produce
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40 % of the income from such business
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60 % of the income from such business
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None of these
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Detailed explanation-1: -Step 2: 60% of the income computed in Step 1 will be treated as net agricultural income and 40% of such income, so arrived at, is treated as business income.
Detailed explanation-2: -The total Income from sale of tea grown and manufactured divides into 40% of Business Income and 60% of agricultural income.
Detailed explanation-3: -Agricultural Income [Section 10(1)] Agricultural income is defined under section 2(1A) of the Income-tax Act. As per section 2(1A), agricultural income generally means: (a) Any rent or revenue derived from land which is situated in India and is used for agricultural purposes.
Detailed explanation-4: -Ans. :-Income-tax Act has provided that 60% shall be exempt from tax out of total manufacturing of tea in India. Hence, out of Rs. 12 crores, the agricultural portion is Rs. 7.20 crores.