What are the tax implications of income received from cash crops or plantations?

Income derived from cultivation of cash crops like tea, coffee, rubber, spices etc. and plantations is treated as agricultural income exempt under Section 10(1). This principle was laid down by the Supreme Court in Baja J. Shrinivas v. CIT (1963). However, income from sale of seeds, after initial processing of crops may be treated as business income depending on facts. The Finance Act 2025 has introduced Section 10(1A) providing that income from cash crops above Rs. 1 crore would be treated as non-agricultural income and taxed accordingly.