Question

In India, a tax on agricultural income can be levied by _______.

• A. both the Central and State Governments
• B. neither the Central, nor the state Governments
• C. only the state Governments
• D. only the Central Governments

Answer 1

Answer: (C)

only the state Governments

Agricultural income is exempted from taxation and not included under total income. The Central Government cannot impose or levy tax on agricultural income. The exemption clause is mentioned under Section 10 (1) of the Income Tax Act of India. However, state governments can charge agricultural tax.