Income from agricultural land is usually tax-free. There are some terms and conditions for this. Ajay Sharma of Jaipur has received Rs 1 lakh out of the agricultural income from the ancestral land of the family. He wants to know if he will have to pay this tax? Does this income have to show them in their income tax return? Moneycontrol asked Tax Expert, CA and CFP Balwant Jain answers to these questions.
Huf’s income is distributed among members
Jain said that it seems that Sharma gets Agricultural Income (Agricultural income) The part of the part of their Huff Is associated with The income of HUF is distributed among its members. In this way, the income distributed in this way has an exgamption under section 10 (2) of the Income Tax Act. However, it will have to show as an income from the participation in HUF under the Income Tax Return (ITR) Schedule EI
Agricultural income also has to be included in the total income
However, if Sharma has inherited agriculture land in which he has a joint stake with other family members, then the agricultural income will be considered as his share in agriculture income. In such a situation, however, agricultural income has an exgamption under section 10 (1), it will have to be included in the income for the purpose of income tax rates. This means that it will be added to his total income for the calculation of the tax slab of Sharma’s regular income. This will increase their average tax rate.
Income will have to be disclosed under schedule EI
In both cases, the amount will have to be disclosed under the Schedule EI (Exhalation Income). In the second situation, since Sharma’s agricultural income is more than Rs 5,000, so that he cannot use ITR-1. They have to use ITR-2. The condition is that they should not have any income from business or profession under the Profit and Gens Head. If Sharma has such income, then he will have to use ITR-3 or ITR-4 according to his income.
Late fee will have to be paid late on ITR filing
Jain said that it needs to be kept in mind that due to low advance tax, due to interest in filing ITR, Sharma will also have to pay a late filing fee of Rs 5000 if the total taxable income is more than Rs 5 lakh. If their income basis is more than the exgamption limit, but does not exceed Rs 5 lakh, then the late filing fee will be only Rs 1,000.