Agricultural income is exempt under section 10(1) of the Income-tax Act – but if you earn anything else, it still pushes up your tax through PARTIAL INTEGRATION, and it works in the NEW regime too. This calculator runs the exact three-step Finance Act computation in both regimes side by side (with the Rs 4 lakh new-regime exemption limit and the Rs 60,000 rebate – most tools online still use years-old slabs or ignore the new regime entirely), splits composite tea, coffee and rubber income under Rules 8, 7B and 7A, tells you which receipts even count as agricultural, and shows exactly what to file: which ITR, Schedule EI, and the land-wise details mandatory above Rs 5 lakh.
Composite income? Split tea / coffee / rubber first (Rules 8, 7B, 7A)
The splits apply only when the SAME assessee grows AND processes. Tea manufactured from bought leaf gets no Rule 8 split – it is fully business income.
Agricultural income tax calculator – both regimes, FY 2025-26 and FY 2026-27
Is it even agricultural income? Check before you claim
Is agricultural income taxable in India?
Agricultural income is exempt under section 10(1) – the Centre cannot tax it. But when your net agricultural income exceeds Rs 5,000 AND your other income exceeds the basic exemption limit, the Finance Act makes it count for the RATE of tax on your other income: this is partial integration, and it applies in the new regime as much as the old. The result is real money – the calculator above shows you the exact extra tax your agricultural income causes.
How partial integration works – the 3-step method
| Step | What is computed |
|---|---|
| Step 1 | Slab tax on (other income + net agricultural income), as if the total were your income |
| Step 2 | Slab tax on (net agricultural income + basic exemption limit) – Rs 4,00,000 in the new regime for all ages; Rs 2.5 / 3 / 5 lakh by age in the old regime |
| Step 3 | Tax on your income = Step 1 minus Step 2. Then the 87A rebate, surcharge (thresholds tested on your NON-agricultural income) and 4 percent cess |
Tea, coffee and rubber – Rules 7A, 7B and 8
| Produce | Agricultural (exempt) | Business (taxable) |
|---|---|---|
| Tea grown and manufactured (Rule 8) | 60 percent | 40 percent |
| Coffee grown and cured (Rule 7B(1)) | 75 percent | 25 percent |
| Coffee grown, cured, roasted and grounded (Rule 7B(1A)) | 60 percent | 40 percent |
| Rubber (Rule 7A) | 65 percent | 35 percent |
| Other produce processed into goods (Rule 7) | Market value of the produce minus cultivation cost | Sale proceeds minus market value minus industrial expenses |
Worked example – salary plus farm income in the new regime
Step 1: tax on Rs 16,00,000 = Rs 1,20,000. Step 2: tax on Rs 6,00,000 + 4,00,000 = Rs 10,00,000 -> Rs 40,000. Step 3: Rs 80,000.
87A rebate: total income (agricultural income EXCLUDED) is Rs 10 lakh, within the Rs 12 lakh limit – so the rebate applies even here, capped at Rs 60,000. Tax = Rs 20,000 + cess Rs 800 = Rs 20,800.
Without the farm income the salary alone would have been fully rebated to NIL – so the “exempt” agricultural income cost Rs 20,800. That is partial integration at work, and why the department wants Schedule EI filled correctly.
Agricultural income tax – FAQs
Is agricultural income fully exempt from income tax?
Yes u/s 10(1) – but with a sting. If your net agricultural income exceeds Rs 5,000 and your other income exceeds the basic exemption limit, it is added back for RATE purposes through partial integration, so your other income gets taxed at higher effective slabs. It never becomes taxable itself; it just makes the rest of your income costlier.
Does partial integration apply in the new tax regime?
Yes – the Finance Act texts expressly cover income chargeable under section 115BAC(1A), with Rs 4,00,000 (for all ages) as the exemption limit used in Step 2. Most online guides and both surviving calculators still compute only the old regime; the ITR utilities apply it in both.
Who does partial integration apply to?
Individuals, HUFs, AOPs/BOIs and artificial juridical persons – anyone taxed at slab rates. Firms, LLPs, companies and co-operatives are outside it because they pay flat rates; their agricultural income is simply exempt.
How is the tax computed when I have both salary and farm income?
Three steps: slab tax on (other income + agricultural income); minus slab tax on (agricultural income + basic exemption limit); the difference is your tax, then the 87A rebate, surcharge and 4 percent cess. The calculator above shows every step, in both regimes, and the exact extra tax your agricultural income caused.
Do I still get the Rs 60,000 rebate u/s 87A if I have agricultural income?
The Rs 12 lakh eligibility test is on TOTAL INCOME, which excludes agricultural income – so farm income never disqualifies you. The rebate then applies against the post-integration tax, capped at Rs 60,000. In the marginal-relief zone just above Rs 12 lakh, the interaction with integration is not settled by CBDT – this calculator caps the relief at Rs 60,000, a position we disclose in the method note.
Which ITR form do I file with agricultural income?
Up to Rs 5,000: ITR-1 or ITR-4 is fine. Above Rs 5,000: ITR-2 (or ITR-3 if you also have business income), with Schedule EI computing gross receipts minus expenses minus brought-forward losses.
What extra details are needed when agricultural income exceeds Rs 5 lakh?
A mandatory land-wise table in Schedule EI: name of district with PIN code, land measurement in acres, whether owned or held on lease, and whether irrigated or rain-fed – for each parcel. The e-filing validation does not accept a blank table. Keep land records (7/12 extract or pattadar passbook), mandi receipts and an expense ledger ready – the CAG found 22.5 percent of large claims unsupported, and claims above Rs 10 lakh are recommended for scrutiny.
Can an agricultural loss reduce tax on my salary or business income?
Never. Rule 9 of the Finance Act First Schedule deems a net agricultural loss to be NIL, so integration simply switches off. The loss can only be carried forward – for up to 8 years, if determined in assessment – to set off against FUTURE agricultural income within this rate computation.
Is dairy, poultry or nursery income agricultural?
Dairy, poultry, fishery and bee-keeping are NOT agricultural – no basic operations on land – and are fully taxable. Nursery income from saplings and seedlings IS deemed agricultural (Explanation 3 to section 2(1A)), even without traditional cultivation. Timber from spontaneous growth is not agricultural either.
How is tea, coffee or rubber income split?
When the same assessee grows AND processes: tea 60 percent agricultural / 40 percent business (Rule 8); coffee grown and cured 75/25; coffee roasted and grounded 60/40 (Rule 7B); rubber 65/35 (Rule 7A). Tea made from bought leaf gets no split – it is entirely business income. The splitter above applies the right rule and feeds both sides into the calculator.
Is salary from a farming or tea partnership firm agricultural income?
The Supreme Court in R.M. Chidambaram Pillai held a partner’s salary from a tea firm is profit in disguise – 60 percent agricultural, 40 percent taxable. The share of profit itself is exempt u/s 10(2A) in any case. The agricultural portion still counts for partial integration in your hands.
Is the sale of agricultural land taxable?
Rural agricultural land is not a capital asset at all – no capital gains and no agricultural income either (the tests: outside a municipality of 10,000+ population and beyond 2/6/8 km aerially, by population). Urban agricultural land is taxable as capital gains, with a section 54B rollover if you farmed it for 2 years and reinvest in agricultural land within 2 years – plan that in our capital gains exemption planner.
Does agricultural income affect surcharge?
No – surcharge thresholds (Rs 50 lakh and up) are tested on your total income EXCLUDING agricultural income. Agricultural income raises your slab-rate tax through integration but never pushes you into surcharge by itself.
What changes under the Income-tax Act 2025?
Only numbering, from tax year 2026-27: the definition moves to section 2(5), the exemption to Schedule II (Sl. 1), the new-regime slabs to section 202, the rebate to section 156, section 54B becomes section 83, and the tea/coffee/rubber splits move to Rules 270-271 with identical percentages. Partial integration continues in the Finance Act 2026 First Schedule exactly as before – this calculator serves FY 2025-26 and FY 2026-27 alike.
Method notes: computation per section 2 and First Schedule Part IV of the Finance Act 2025/2026 (read from the gazette texts) – partial integration applied in both regimes with the Rs 4,00,000 new-regime limit in Step 2; 87A eligibility tested on total income excluding agricultural income; surcharge thresholds on non-agricultural total income with marginal relief; brought-forward losses accepted as entered (the law requires them to be determined in assessment); special-rate capital gains are outside this slab computation – use the advanced calculator for mixed cases. The 87A marginal-relief interaction with integration just above Rs 12 lakh is not settled – this tool caps the relief at Rs 60,000 and keeps the computation continuous. Reviewed by a practising CA; updated July 2026. Planning guidance, not advice on an actual assessment.