No, agricultural income is not fully exempted from tax.
Exemption on agricultural income is only allowed if agricultural tax has been paid to the provincial government.
Will FBR also collect tax if agricultural tax has been paid in the province?
No, if you have paid tax to the provincial government on your agricultural income, FBR cannot collect double tax. This law is made to prevent double taxation.
What happens if agricultural tax is not paid to the provincial government?
- If agricultural tax is not paid to the province, FBR will include this income in your taxable income and impose tax on it.
- I have declared agricultural income in my income tax returns but have not paid tax in the province, what will be the consequences?
- In such a case, the FBR will consider it as part of your total income and you have to pay tax on it.
I have earned both salary and agricultural income. My agricultural income is Rs. 600,000. In this case, am I exempt from tax?
Yes, if your total annual income is up to Rs. 600,000, then federal income tax is not applicable on you.
However, you must file a tax return on your agricultural income with the provincial government to claim the exemption.
Where is the provincial tax return on agricultural income filed?
Each province has a separate Board of Revenue or a relevant agricultural tax office.
You can file an agricultural income tax return there through a form or online.
