An owner lets bare land in India to a farmer for cultivation and receives ₹12,000 a year as rent. How does the Income-tax Act, 2025 treat the rent?
Question and options
An owner lets bare land in India to a farmer for cultivation and receives ₹12,000 a year as rent. How does the Income-tax Act, 2025 treat the rent?
House-property income, taxable
Business income, taxable
Other-sources income, taxable
Agricultural income, exempt
Answer and explanation
Correct answer: D - Agricultural income, exempt
Rent derived from land situated in India and used for agricultural purposes is agricultural income under section 2(5)(a) of the Income-tax Act, 2025, and Schedule II (Table item 1) excludes agricultural income from total income. House property covers buildings and appurtenant land, not bare land let for cultivation.
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