Discuss in brief the provisions of partial integration of agricultural income with the total income of an assessee in computing his income tax liability.

Under the Income Tax Act, agricultural income is exempt from income tax in India. However, when an individual earns both agricultural and non-agricultural income, the provisions of partial integration of agricultural income with the total income of the assessee come into play.

As per the Income Tax Act, if an individual’s non-agricultural income exceeds the basic exemption limit, which is currently Rs. 2.5 lakhs, then the agricultural income is partially integrated with the non-agricultural income for tax purposes. The amount of agricultural income that is integrated with the non-agricultural income is determined based on the following rules:

1. The amount of agricultural income that is less than or equal to Rs. 5,000 is completely exempt from integration with non-agricultural income.
2. The amount of agricultural income that exceeds Rs. 5,000 but is less than or equal to Rs. 1 lakh is integrated with non-agricultural income at 50%.
3. The amount of agricultural income that exceeds Rs. 1 lakh is integrated with non-agricultural income at 100%.

For example, if an individual earns Rs. 3 lakhs from non-agricultural sources and Rs. 1.5 lakhs from agricultural sources in a financial year, then the Rs. 5,000 of agricultural income is exempt from integration. The remaining Rs. 1.45 lakhs of agricultural income will be integrated as follows: 50% of Rs. 1 lakh (Rs. 50,000) will be integrated with non-agricultural income, and the remaining Rs. 45,000 of agricultural income will be exempt from integration.

The total income of the individual for tax purposes will be Rs. 3.95 lakhs (Rs. 3 lakhs non-agricultural income + Rs. 50,000 partially integrated agricultural income + Rs. 45,000 exempt agricultural income). The individual will be liable to pay tax on this amount as per the applicable tax slabs.

In conclusion, partial integration of agricultural income with total income is a provision under the Income Tax Act that applies to individuals who earn both agricultural and non-agricultural income. The amount of agricultural income that is integrated with non-agricultural income depends on the total amount of agricultural income earned by the individual and is subject to certain exemptions and rules.