The farmers are generally exempt from paying income tax on agricultural income, but there's more nuance. As per Section 2(1A) and Section 10(1) of the Income Tax Act, agricultural income includes revenue from cultivation of crops, leasing farmland for agriculture, sale of farm produce (including from a nursery and farm buildings) on land in India. This often raises the question: Do farmers pay taxes in India? The answer is true agricultural income is fully exempt at the central level. So, if your only income is from farming, you generally don’t pay income tax.
Do Farmers in India Pay Income Tax?
When agricultural income exceeds R. 5,000 and you also have non-agricultural income (like salary or business income), your agricultural income is added to your total income to determine the applicable tax slab though the farmland income itself remains untaxed.
This can result in a higher slab and more tax on your other income.
While central laws exempt agricultural income, states can levy their own agricultural tax. Kerala, for instance, taxes agricultural income over Rs. 50,000 annually. However, most states, like Maharashtra, UP, and Gujarat, do not levy any such tax.
Some non-farm individuals mislabel non agricultural income as agricultural to evade taxes. The Income Tax Department combats this including using satellite imagery to verify cultivation claims.
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Do Farmers Pay Taxes in India?
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2025-07-11T07:29:27+00:00 2025-07-11T07:29:29+00:00Comment
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