# Composite Income — Splitting Business and Agricultural Income
Where a product is both grown (agricultural activity) and manufactured/processed (business activity) by the same person, the income is composite. Specific Income-tax Rules apportion it between exempt agricultural income and taxable business income.
## The apportionment rules
| Rule | Income source | Agricultural % (exempt) | Business % (taxable) |
|---|---|---|---|
| 7A | Sale of rubber products from rubber plants grown by the seller in India | 65% | 35% |
| 7B | Sale of coffee grown and cured by the seller in India | 75% | 25% |
| 7B | Sale of coffee grown, cured, roasted and grounded by the seller in India | 60% | 40% |
| 8 | Sale of tea grown and manufactured by the seller in India | 60% | 40% |
> Only the business percentage is taxed under the head PGBP; the agricultural percentage is exempt u/s 10(1) (but counts for rate-purposes / partial integration).
## Allowance for replantation costs
- A deduction is allowed for the cost of replanting bushes/plants (tea bushes, rubber plants, coffee plants) that have died or become permanently useless, within an area already planted.
- No deduction is allowed where a subsidy for replantation/replacement is received that is exempt under Section 10(30) or Section 10(31) (you cannot claim a cost that was funded by exempt subsidy).
## Subsidy exemptions
- Section 10(30): exempts subsidies from the Tea Board for replantation, replacement, rejuvenation or consolidation of tea areas.
- Section 10(31): exempts subsidies from the respective boards for replantation, replacement, rejuvenation or consolidation of areas for rubber, coffee, cardamom or other notified commodities.