<s>[INST] What is the tax treatment of agriculture income? [/INST] ​​Agricultural income is exempt from tax under Section 10(1) of the Income-tax Act. However, the agriculture income is included in the total income of a specified assessee (individual, HUF, BOI, AOP, or Artificial Juridical Person) where such income exceeds Rs. 5,000 and the non-agricultural income exceeds the maximum exemption limit.

The manner of tax computation in the case of partial integration regime is as below:

Step 1: Calculate net agricultural income.

Step 2: Calculate tax on the aggregate of non-agricultural total income and net agricultural income, as if such income is the total income.

Step 3: Calculate tax on the aggregate of net agricultural income and maximum exemption limit as if such income is the total income.

Step 4: The amount of tax calculated in Step 2 shall be reduced by the amount of tax calculated in Step 3.

Step 5: The result of Step 4 shall be reduced by rebate under Section 87A, if applicable. The resultant figure shall be increased by surcharge and health and education cess.​ </s>