# Agricultural Income vs Non-Agricultural Income: Examples
Under the Income-tax Act, agricultural income is exempt under Section 10(1). However, the classification of what qualifies as agricultural income is often tested. Below is a list to help you classify activities correctly.
## Agricultural Income (Exempt under Section 10(1))
1. Income from growing and selling crops (wheat, rice, etc.)
2. Rent or revenue from agricultural land situated in India
3. Income from crop-sharing (batai) arrangements
4. Income from orchards (e.g., mango, apple farms)
5. Income from farm buildings used for storage or worker residence (subject to conditions)
6. Growing and selling flowers on agricultural land
7. Nursery income — only if plants are grown in soil on agricultural land
8. Income from sale of rural agricultural land (rural land is not a capital asset)
9. Income from basic processing of produce (e.g., sun-drying of crops) where such processing is ordinarily employed to render the produce fit for market
## Non-Agricultural Income (Taxable)
1. Poultry farming
2. Dairy farming
3. Fisheries (fish farming)
4. Processing beyond the basic level (e.g., making jaggery from sugarcane — value addition)
5. Renting land for film shooting / weddings
6. Nursery income from urban pots / terraces (not in soil on agricultural land)
7. Income from sale of urban agricultural land (treated as capital asset)
8. Income from farmhouses not used for agricultural purposes
9. Income from growing trees on non-agricultural land
10. Tea, coffee, and rubber income — partly taxable (governed by Rules 7A / 7B / 8)
## Key Test Points
- The land must be situated in India.
- The activity must involve basic operations (tilling, sowing, planting) plus subsequent operations (weeding, harvesting).
- Mere ownership or rental of land for a non-agricultural purpose does not make the income agricultural.