Produced by: Manoj Kumar
A Pune software engineer left his ₹18L job to grow turmeric on leased land—and now earns tax-free income while living debt-free, according to an India Today feature.
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Anyone in India can legally farm—just lease or buy agricultural land. No special background, license, or approval required, as per Ministry of Agriculture guidelines.
Under Section 10(1), income from crops and land is tax-free—but only if it’s from genuine agricultural activities. No loopholes for just owning the land.
Earn both salary and farm income? The taxman uses “aggregation”—boosting your slab rate without taxing the farm income. It’s a quiet hike few new farmers see coming.
Income from dairy or poultry? That’s not agri income unless tightly linked to cultivation. Many salaried newcomers misclassify this—and face penalties.
To claim tax-free status, keep records: land deeds, crop sales, expense logs. A 2024 CBDT circular tightened rules to block fake agricultural claims.
Cross ₹5,000 in farm income? You must file ITR-2 instead of ITR-1. Many new farmer-entrepreneurs miss this and risk scrutiny from the income tax department.
Some states technically tax farm income over ₹5,000—but enforcement is rare. Still, it’s a risk for large landholders with significant earnings.
Commercial-scale agri ventures may face tax if they add value post-harvest. A recent case in Tamil Nadu saw GST authorities classify packaged grains as taxable goods.