Chapter II Chapter II

Charge of agricultural income tax.-Agricultural income tax at the rate or rates specified in the Schedule shall be charged for each year in accordance with and subject to the provisions of this Act and the rules framed thereunder on the agricultural income of the previous year of every person : Provided that such tax shall not be payable by a person whose agricultural income of the previous year does not exceed rupees six thousand :

Determination of agricultural income Determination of agricultural income.-

1. (1) The agricultural income mentioned in section 3 shall be deemed to be the sum received, accrued or arisen in the previous year on account of agricultural income after deducting an amount equivalent to twenty-five per cent of such income : Provided that in the case of an assessee who produces complete accounts which are found to have been properly maintained by the assessing authority, the following amounts shall be deducted, if so requested by the assessee, instead of the amount of 25% mentioned in this sub-section :-
   • (a) the sum actually paid in the previous year as revenue to the Government or as rent to the landlord or any local cess or rate, in respect of the land from which such agricultural income is derived ;
   • (b) interest paid on any amount borrowed and actually spent on any capital expenditure incurred exclusively for the benefit of the land, from which such agricultural income is derived ;
   • (c) any interest paid on any mortgage or any other kind of debt or any interest paid on other capital charge incurred exclusively for the purpose of acquiring the property from which such agricultural income is derived ;
   • (d) depreciation at the rate of 5% on any machinery or plant purchased or acquired exclusively for the benefit of the land from which such agricultural income is derived or for the purpose of deriving such agricultural income therefrom : Provided that the aggregate of all depreciation allowance made under this Act shall in no case exceed the original cost of such machinery or plant of the assessee ; and
   • (e) any other expenditure incurred by the assessee not being in the nature of capital expenditure or personal expenditure, laid out wholly or exclusively for the purpose of deriving such agricultural income from such land.
2. (2) In computing the agricultural income of any individual, there shall be included all such income as arises directly or indirectly-
   • (i) to the spouse of such individual from assets transferred directly or indirectly to the spouse by such individual otherwise than for adequate consideration or in connection with an agreement to live apart ;
   • (ii) to a minor child, not being a married daughter of such individual from assets transferred directly or indirectly to the minor child by such individual otherwise than for adequate consideration ; and
   • (iii) to any person or association of persons from assets transferred otherwise than for adequate consideration to the person or association of persons by such individual, to the extent to which the income from such assets is for the immediate or deferred benefit of his or her spouse or minor child (not being a married daughter) or both.

Exclusion of income from trust etc.-Any income derived from property held under trust or other legal obligation wholly for religious or charitable purposes and, in the case of property so held in part only for such purposes, the income applied or finally set apart for application thereto, shall be exempt from liability to tax under this Act.

Agricultural income accruing in the State to persons residing outside the State.-Agricultural income accruing or arising to any person residing outside the State whether directly or indirectly through or from any land in the State shall be deemed to be derived within the State and shall be chargeable to agricultural income-tax in accordance with the provisions of this Chapter.

A. Application for registration.-

1. (1) An application may be made to the assessing authority on behalf of any firm constituted under an instrument of partnership specifying the individual shares of the partners, for registration for the purpose of this Act.
2. (2) The application shall be made by such person or persons and at such time as shall contain such particulars and shall be in such manner as may be prescribed and shall be dealt with by the assessing authority in such manner as may be prescribed.