Mr. A has about 25 Bighas Agriculture Land . Now while filing Income Tax return ,he wants to show Agriculture Income but he does not have exact amount of Income from agriculture work. Can he show Agriculture Income on estimation basis? further whether any document, he need to have as proof of agriculture income ? What if he does also not have Sale bill of agriculture produce? Is it will be good to show income on estimation basis ,if yes then how much income?
In your case you have agriculture and business income.
Normally it has been practice to hide business income through agriculture income. People also use agriculture income as a source to convert black money to white money.
That being said, no question should be raised on genuine income.
However you need to satisfy assessing officer:
- Quantum of agriculture income with proof,
- Expenses related to agriculture income are not claimed in business profits
Secondly how do you estimate agriculture income? There should be some base.
However, even agriculture income has to be clubbed with business income for calculating tax.
So, it is better to have documents as supporting for agriculture income or show agriculture income at higher side.
In one case assessing officer asked for documents supporting agriculture income. However it seemed wrong but accountant had to prepare books of accounts of agriculture income. Depending on nature of crop and market rate you can arrive on agriculture income. You can calculate agriculture income based on standard margin of other nearby farms.
Further you can do reverse calculation by taking full year income minus business income.
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