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Is sale of fruits and vegetables grown at home agriculture income and tax exempt in India?

Personal Finance & Money Asked by Savdi on July 30, 2021

In India, selling of nursery plants in pots and mushrooms cultivation (which is not actually done on agriculture land but in controlled environment) is considered agriculture income.

Following article https://www.financialexpress.com/archive/cultivating-tax-free-income/47843/ mentions that "If you grow flowers even in cities and towns on small plots of land, like in the compound of your house or even on a large terrace in earthen or plastic pots and you genuinely carry on this activity, the income would be treated as agricultural income and cannot be taxed."

Also refer this answer: https://www.quora.com/Is-agricultural-income-from-non-agricultural-land-exempt-from-income-tax/answer/Jagdish-Handa

Also my understanding of Section 2(1A) of Income Tax Act which defines "agricultural income" does not restrict income from cultivation at home premises from the purview of "agricultural income".

I follow cultivation techniques like tilling of land, sowing of the seeds and taking care of the plants. If I sell fruits and vegetables cultivated and grown in pots and land in my home premises, will it be considered agriculture income and it will be tax exempt?

Note: Please also state the the section/law which supports your answer.

One Answer

Agricultural income is exempt as per section 10(1) and section 2(1A). No other section. If the land is situated in India, it is assessed for land rate, agricultural operations are carried out, the income is agricultural income. As per Expln 3, income from sale of saplings and seedlings are deemed agricultural income. As per FAQ, income from animal husbandry is not agricultural income. Income from sale of fruits and vegetables produced through agricultural operations (tilling etc.) from a land assessed to land rate and situated in India falls within section 2(1A).

Answered by Jayaprasad Ramakrishna on July 30, 2021

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