# Identifying Agricultural Income vs Non-Agricultural Income
## Agricultural Income (EXEMPT under section 10(1))
1. Income from growing and selling crops (wheat, rice, paddy, sugarcane, pulses, etc.).
2. Rent or revenue from agricultural land in India.
3. Income from crop-sharing (batai) arrangements between landholder and cultivator.
4. Income from orchards (e.g., mango, apple, orange farms) where basic agricultural operations are carried out.
5. Income from farm buildings used for storage of agricultural produce or as residence by agricultural workers (subject to section 2(1A)(c) conditions).
6. Growing and selling flowers on agricultural land.
7. Nursery income — if plants are grown in soil on agricultural land.
8. Income from sale of rural agricultural land (also exempt because it is not a capital asset u/s 2(14)).
9. Income from basic processing of produce necessary to make it marketable (e.g., sun-drying crops, threshing, winnowing).
## Non-Agricultural Income (TAXABLE)
1. Poultry farming — no use of land for cultivation.
2. Dairy farming — animal husbandry, not cultivation.
3. Fisheries / fish farming — not derived from land.
4. Processing beyond basic level (e.g., converting sugarcane to jaggery, milk to ghee, latex to rubber sheets) — the non-agricultural portion is taxable.
5. Renting agricultural land for film shooting / weddings — not agricultural use.
6. Nursery income from urban pots/terraces — no agricultural land used.
7. Income from sale of urban agricultural land — taxable as capital gains (urban agricultural land IS a capital asset).
8. Income from farmhouses not used for agricultural purposes — taxable as house property/other sources.
9. Growing trees on non-agricultural land (e.g., spontaneous growth, forestry) — not agricultural.
10. Tea, coffee, rubber income — partly agricultural and partly business — see Rules 7A, 7B and 8 for apportionment (e.g., Tea: 60% agri / 40% business under Rule 8).
## Quick Test Questions
- Was land in India used?
- Were basic agricultural operations performed (tilling, sowing)?
- Was the processing only to make produce marketable?
If any answer is NO → likely not agricultural income.