Are there any tax benefits associated with Agri Loan EMIs?

As per Indian tax rules, income earned from agriculture is tax-free. But if a farmer has an agriculture income above ₹5,000 and also has other sources of income like business, salary, etc., then tax rates on those incomes can be higher.

Agriculture income above ₹5,000 can increase the tax slab rates applied to non-farming income sources like business profits, interest income, etc. This provision applies to individuals, HUFs, AOPs, BOIs, etc.

The higher tax rates apply when:

• Agriculture income is more than ₹5,000

and

• Income from non-farm sources is above the basic exemption limit as per age and regime chosen. For example, it was above ₹2.5 lakhs under the old tax regime for people under 60 years of age
• This does not apply to companies, LLPs, cooperative societies, etc. Non-farm income sources like poultry, dairy, fishery, and timber sales also do not get tax-free treatment.

Below are some examples of non-agricultural income:

• Income from poultry, dairy farming, beehiving, fisheries
• Income from agricultural land held as stock-in-trade
• Dividends from the agriculture income of a company
• Income from cutting and selling timber trees

Use the agricultural loan EMI calculator to understand the interest payable and the EMI to make an informed decision.