How To Earn Unlimited Tax Free Income ?

You are required to pay income tax if your income is beyond the threshold prescribed under the Income Tax Act,1961. It is also possible to claim certain deductions and exemptions from the total taxable income. But if the balance income after allowing all the permissible deductions is still taxable, then you have to pay the income tax at prescribed rates under the Income Tax Act. People however, generally ask the Chartered Accountants a very common question –How To Earn Unlimited Tax Free Income ?

The other related questions which are often asked by the people from the Chartered Accountants are listed below:

• How To Earn Tax Free Income ?
• How To Earn Tax Free Income In India ?
• Is is possible to earn tax free income in India ?
• What is the Sure Shot method to earn tax free income ?

The questions asked by the people look very difficult to answer but the fact is that it is very much possible to earn unlimited tax free income in India. In this article, we will discuss and explain one sure shot income source which is completely tax free without any limit.

Agricultural income earned by any person in India is exempt under Section 10(1) of the Income Tax Act,1961. What is more interesting is the fact  that this agricultural income is tax free without any limit. You can have unlimited amount of agricultural income without paying even a single rupee towards income tax.

Are there any conditions attached with tax free Agricultural Income ? No there are no conditions prescribed for earning the agricultural income. If you are a real farmer and are genuinely engaged in the farming and agricultural activities, then whole of the income earned by you is totally tax free.

However, some people may also try to misuse this special provision of the Income Tax Act and may show bogus agricultural income from bogus agricultural activities. Such illegal things are not advisable and one should not indulge in such illegal activities.

If you will try to misuse the tax free income provision of the Income Tax Act by showing bogus income through bogus agricultural activities in order to claim the total tax exemption, you will be caught by the income tax department at the time of your scrutiny assessment and in case you failed to prove the genuineness of the agricultural activities and agricultural income, then you will have to pay not only the tax, but also the heavy penalty under the income tax Act.

It is therefore once again advised that though Income Tax Act,1961 has provided a way to earn unlimited tax free income, but the exemption is not meant for misuse but is available only for genuine farmers doing the agricultural activities.

Disclaimer : The advise contained in this article is based on the current provisions of the Income Tax Act,1961 and is provided as a general guidance for the readers. For specific  and customised advise, people are advised to consult their tax consultants and/or chartered accountants

Also Raed : SURE SHOT TAX FREE INCOME SOURCES

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