Rent is received for land situated in India that is let to a tenant who uses it to grow crops. How is the rent classified under the Income-tax Act, 2025?
Question and options
Rent is received for land situated in India that is let to a tenant who uses it to grow crops. How is the rent classified under the Income-tax Act, 2025?
Business income
Income from house property
Income from other sources
Agricultural income
Answer and explanation
Correct answer: D - Agricultural income
Section 2(5)(a) of the Income-tax Act, 2025 treats rent or revenue derived from land in India used for agricultural purposes as agricultural income, which is excluded from total income. It is not income from house property, because that head covers buildings and land appurtenant to them, not agricultural land.
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