| Question And Answer | |
|---|---|
| Subject: | An AOP assessed to MMR of tax – liable to partial integration of agricultural income |
| Category: | Income-Tax |
| Querist: | Rajesh G Dhakappa |
| Answered by: | Mr . H. N. Motiwalla |
| Tags: | Agricultural Income, AOP, Association of persons (AOP), MMR tax |
| Date: | August 8, 2024 |
AOP assessed at MMR of tax is paying tax at 30% with no exemption and tax is not levied based upon slab rates. It has non agricultural income of Rs 3,00,000/- and Agricultural income of Rs 40,00,000/- One of the basic condition of partial integration is that it should have non ari income above the exemption limit. Since this is an AOP taxed at MMR it has no exemption limit. In such a case will partial integration of the agricultural income be justified? The AO claims its justified. Since the AOP is not taxed at slab rates, the AO has taxed both Agri and non agri incomes at MMR rate of 30% and while deducting the Agri income he has applied the slab rates thereby increasing the tax liability which also exceeds the non agri income.
Companies, Firms, LLPs and societies are taxed at maximum rates and agri income is not integrated in their case.
Kindly advise with case laws citations if any.
The contention of AO is correct, however, he has to calculate tax as per paragraph A of Part 1 of the First Schedule : Then tax payable on non agricultural income and agricultural income will not exceed the non agricultural income.