Lux Investing

Investing agricultural income in real estate development and taxed on that?

Hello This is my first question on yahoo answers India. I am going to invest Rs. 1000000 in real estate development from my AGRICULTURAL income. Now if i make profit of Rs 500000 in one year, would i have to pay tax in that? As it was derived from agricultural income. Thanks

Public Comments

1. source of money is not subject for income tax but source of income is.so if you earn from real estate business than it doesn't matter that you have invested money from earning of your agriculture income it will be taxed normally ,no relief to you.so you have to pay tax on 500000 rs at the rate as applicable to others
2. Section 10(1) of income tax act 1961 exempt agriculture income to be taxed but any income derive from any other source ( other then agriculture income exempted u/s 10(1)) is taxable wheather the income is generated through capitalizing the agriculture income any other income. so the present case of income Rs 500000 is taxable at the current slab rate
3. If you have only agricultural income, than it is exempt form Income tax. If you have other income plus agricultural income than agricultural will be included in the total income for rate purpose only. Only other income as said in above paragraph will be taxable.