Allowable Deductions from Determining Agriculture Income
Agriculture income means any income derived by cultivation from any land or building in a country like Bangladesh, India etc., and used for agriculture purpose. This income is considered for rate purposes while ascertaining the income tax liability of an individual. It is a vital sign as it gives information on the feasibility of the agricultural sector and is accurately taken into account into discussions on policy perspectives.
Examples of Agricultural Income: Income from sale of replanted trees; Rent received for agricultural land; Share of profit of a partner from a firm engaged in agricultural operations; Income derived from the sale of seeds etc.
The following are an allowable deduction from income of Agriculture –
- Land development tax or rent.
- Local tax.
- Process cost.
- Cultivation or raising livestock.
- Repairing and maintains cost.
- Transportation cost.
- Insurance premium.
- Maintenance cost of a capital asset.
- Irrigation project cost.
- Depreciation of capital assets.
- Interest on a mortgage.
- Interest on borrowed capital.
- Balancing depreciation.
- Loss on sale of agricultural tools.
- Revenue expenditure.
- Development cost.