Is animal husbandry treated as agricultural income and hence tax free?

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Animal husbandry or rearing animals for selling them is not considered as agricultural income and hence the income derived from animal husbandry is not tax free.

Agricultural income is tax free and the income from agriculture need not be added to your total income for the purpose of payment of taxes.

Is animal husbandry treated as agricultural income and hence tax free?

This means while agricultural income is tax free, those garnering income from rearing animals for their sale or animal husbandry as they call it will have to add the income to total income.

What is agricultural income?

To consider an activity as agriculture the basic operation such as tilling, sowing, irrigating & harvesting should have been carried out.

Thereafter, what is sold in the market should be the primary product harvested. Receipt from such sale is considered as agricultural receipt.

If however some further processing or modification were done to the harvested product to enhance its marketable value then such enhanced value would be considered as business income.

Now, it's also important to understand that if in the agricultural income you also have some other income the latter would be taxed.

Read more on agricultural income and what is tax free here

The other income includes income from investments, property etc. While calculating tax on them, your agricultural income will be taken into account, so that you pay tax at a higher rate on that other income.

Story first published: Saturday, May 31, 2014, 10:34 [IST]
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