Under the Income-tax Act, 2025 read with the Income-tax Rules, 2026, if an assessee is engaged in the…

Under rule 271(1) of the Income-tax Rules, 2026 (Table: Sl. No. 4) (formerly rule 8 of the Income-tax Rules, 1962), income derived from the sale of tea grown and manufactured by the seller in India is computed as if it were business income, and 40% of such income is deemed to be the income liable to tax. The remaining 60% is agricultural income, which is not included in total income under section 11 read with Schedule II (Table: Sl. No. 1) of the Income-tax Act, 2025. 40% is the taxable business portion, not the agricultural portion. 100% and 50% are not the prescribed shares. For comparison, the taxable portion is 25% for coffee grown and cured by the seller.