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CIRCULAR NO.
10/2006
October 16, 2006
Filing of Return of Income by the
Coffee growers being individuals covered by Rule 7B of the
Income tax Rules, 1962 - Clarification regarding.
Reference is
invited to Board's Circular No. 10/2003 dated 24th
December, 2003 which provided that an individual deriving income
from growing and curing of coffee who is not covered by the
first proviso to section 139(1) of the I.T. Act, would not be
required to file a return of his income if his income from
growing and curing of coffee was Rs.
2 lakhs or less. The Finance Act,
2005 has subsequently raised the exemption limit for individual
taxpayers from Rs. 50,000 to
Rs. l lakh
from the Assessment year 2006-07. The exemption limit in the
case of an individual, being a woman resident in
India and
below the age of 65 years, has been increased to
Rs. 1,35,000.
In the case of an individual, being a resident in
India, who
is of the age of 65 or more at any time during the previous
year, the exemption limit has been raised to
Rs. 1,85,000.
2.
The Board has reconsidered the matter of filing of return by the
individual coffee growers in order to provide further relief to
them and it is clarified that:
(i)
An individual deriving income from growing and curing of coffee
would not be required to file his return, if the aggregate of
25% of his income from growing and curing of coffee and income
under all other sources liable to tax in accordance with the
provisions of this Act, is equal to or less than the exemption
limit (1st slab of the rates of Income-tax) prescribed for
individual tax payers in the first Schedule of the Finance Act
of the relevant year. Therefore taking Assessment Year 2006-07
as an example,
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(a) An
individual derives income from growing and curing of coffee |
= |
Rs.
4,00,000 |
|
Other income |
= |
Nil |
|
Taxable
income under Rule 7B(1) of the IT Rules, 1962 is 25% of
Rs. 4,00,000 |
= |
Rs.
1,00,000 |
|
No return is
required to be furnished. |
|
|
|
(b) An
individual derives income from growing and curing of coffee |
= |
Rs.
3,00,000 |
|
Other income |
= |
Rs.
25,000 |
|
Taxable
income under Rule 7B(1) of the IT Rules, 1962 is 25% of
Rs.3,00,000 + Rs.25,000 |
= |
Rs.
1,00,000 |
|
No return is
required to be furnished. |
|
|
|
(c) A woman
resident in
India
below the age of sixty five years derives income from
growing and curing of coffee |
= |
Rs.
5,40,000 |
|
Other income |
= |
Nil |
|
Taxable
income under Rule 7B(1) of the IT Rules, 1962 is 25% of
Rs. 5,40,000 |
= |
Rs.
1,35,000 |
|
No return is
required to be furnished. |
|
|
|
(d) An
individual being a resident in India, who is of the age of
sixty five years or more at any time during the previous
year relevant to the Assessment Year 2006-07 derives income
from growing and curing of coffee |
= |
Rs.
7,40,000 |
|
Other income |
= |
Nil |
|
Taxable
income under Rule 7B(1) of the IT Rules, 1962 is 25% of
Rs.7,40,000 |
= |
Rs.1,85,000 |
|
No return is
required to be furnished. |
|
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(ii) An
individual deriving income from growing, curing, roasting and
grounding of coffee with or without mixing chicory or other
flavouring ingredients, would not be
required to file the return of income if the aggregate of 40% of
his income from growing, curing, roasting and grounding of
coffee with or without mixing chicory or other
flavouring ingredients and income
under all other sources liable to tax in accordance with the
provisions of this Act, is equal to or less than the exemption
limit (1st slab of rates of Income tax) prescribed in the First
Schedule of the Finance Act of the relevant year. Consequently
for the Assessment Year 2006-07:
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(a) An
individual derives income from growing, curing, roasting and
grounding of coffee with or without mixing chicory or other
flavoured ingredients |
= |
Rs.
2,50,000 |
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Other income |
= |
Nil |
|
Taxable
income under Rule 7B(1A) of the IT Rules, 1962 is 40% of
Rs. 2,50,000 |
= |
Rs.
1,00,000 |
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No return is
required to be furnished. |
|
|
|
(b) An
individual derives income from growing, curing, roasting"
and grounding of coffee with or without mixing chicory or
other flavoured ingredients |
= |
Rs.
2,00,000 |
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Other income |
= |
Rs.
20,000 |
|
Taxable
income under Rule 7B(1A) of the IT Rules, 1962 is 40% of
Rs.2,00,000 + Rs.20,000 |
= |
Rs.
1,00,000 |
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No return is
required to be furnished. |
|
|
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(c) A woman
resident in
India
below the age of sixty five years derives income from
growing, curing, roasting and grounding of coffee with or
without mixing chicory or other
flavoured ingredients |
= |
Rs.
3,37,500 |
|
Other income |
= |
Nil |
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Taxable
Income under Rule 7B(1) of the IT Rules, 1962 is 40% of
Rs. 3,37,500 |
= |
Rs.
1,35,000 |
|
No return is
required to be furnished. |
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(d) An
individual being a resident in India, who is of the age of
sixty five years or more at any time during the previous
year relevant to the Assessment Year 2006-07 derives income
from growing, curing, roasting and grounding of coffee with
or without mixing chicory or other
flavoured ingredients |
= |
Rs.
4,62,500 |
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Other income |
= |
Nil |
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Taxable
Income under Rule 7B(1) of the IT Rules, 1962 is 40% of
Rs.4,62,500 |
= |
Rs.
1,85,000 |
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No return is
required to be furnished. |
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3.
This may be brought to the notice of all concerned.
[F.No.
225/36/2006-ITA-II]
Go to
"Income Tax Update - 2006" Listings
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