Agricultural income is tax-free

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: Chapter VI-A related with Sec 80C to Sec 80U) is nil.

2. The second condition is quite complicated. It states that the aggregate of income from (i) dividend other than dividends from domestic companies, (ii) interest on securities (iii) interest other than interest on securities, and (iv) repayment of deposits under the National Saving Scheme, does not exceed the maximum amount, which is not chargeable to tax. If you examine these conditions carefully, you will find that all the four avenues enumerated above have a threshold beyond which TDS is applicable. All the rest of the conditions have no thresholds. Yes, quite complicated indeed!

To mitigate the pressure on senior citizens arising out of these complications, the 2nd condition is not applicable to them (tax threshold Rs 2.25 lakh).

We strongly feel that if this is complicated, it is complicated both for senior and non-senior citizens. This declaration should be made before the very first payment during the year becomes due. If the ITO discovers a defect in the declaration, it is his duty to allow the defect to be rectified if the assessee submits a petition to rectify the defect - Vijay Hemant Finance & Estate Ltd v ITO (1999) 105Taxman519, 238ITR282 (Mad).

This facility of using either of the Forms is not available to NRIs.

For the last many years I used to file tax returns under my HUF account in which major income was property rentals, bank interests and agricultural income. I disposed off the property, the source of rental incomes, in the financial year 2006-07. During the FY 07-08 the income of the HUF was bank interest of about one lakh and agricultural income was two lakh. Kindly advice in these circumstances if it is necessary for the HUF to file tax returns for FY 2007-08.

—Sandhu

1. Agricultural income is tax-free but is aggregated with other income only for rate, if it exceeds Rs 5,000. Since the total income of exigible to tax is below the tax threshold, the tax payable even with rate purpose happens to be nil.

2. U/s 139(1), returns must be filed if the income chargeable to tax is over the tax threshold, even if it comes below the threshold after claiming deductions on or before 31st July of the next financial year. This is so even if the TDS covers the tax payable liability.