GENERAL KNOWLEDGE

Detailed explanation-1: -This method or concept may be called as partial integration of agricultural income with non-agricultural income. The purpose behind this method is to tax non-agricultural income at higher rates of tax. (2) Non-agricultural income (i.e., total income excluding net agricultural income) is above the basic exemption limit.

Detailed explanation-2: -Partial agricultural income is the income where the assessee is growing agricultural produce and using them as raw material for the manufacturing of products. Here income from the sale of products is partial agriculture income and partial non-agricultural income.

Detailed explanation-3: -In such a situation, it becomes necessary to disintegrate (bifurcate) the two incomes because agricultural income is exempt from tax and non-agricultural income is taxable. Rules 7, 7A, 7B and 8 of Income Tax Rules, 1962 provide the method of segregating the two incomes.

Detailed explanation-4: -Partial Integration is done in order to deny the benefit of slab rate. It is done only in cases of those assessees who get the benefit of slab rate like Individual/HUF/AOP/BOI and that too only if Agricultural Income >5000 and Non Agricultural Income > non taxable slab rate.