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Income derived from growing and manufacturing tea in India is apportioned between business income and agricultural income in the ratio of:
A35 per cent business and 65 per cent agricultural
B25 per cent business and 75 per cent agricultural
C40 per cent business and 60 per cent agricultural
D50 per cent business and 50 per cent agricultural
Answer & Solution
Correct answer: C. 40 per cent business and 60 per cent agricultural
1. Rule 8 apportions income from tea grown and manufactured in India: 40% business income, 60% agricultural income.
2. The parallel splits are 35%/65% for rubber (Rule 7A) and 25%/75% for coffee grown and cured (Rule 7B) — 40%/60% also applies to coffee grown, cured, roasted and grounded in India.
3. Option A is the rubber ratio, the standard confusion pair with tea.
4. The apportionment presupposes operations in India; growing abroad or processing abroad takes the income outside these rules entirely.
_Source: ICAI CA Inter P3(A) Income-tax SM (May 2026), Ch 3 Unit 3 PGBP, PDF p. 124_
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