Q.State, with reasons, whether the following is agricultural income: interest received on the late payment (arrears) of rent due from agricultural land.

Interest compensates for delay in payment; it is a different kind of receipt from the rent it relates to.

Section 2(1A)(a) exempts rent or revenue derived FROM agricultural land. Interest paid on a delayed rent payment is compensation for the DELAY in payment, not the rent itself — it is a distinct receipt that arises from the tenant's default, not from the land's agricultural use. The rent, when eventually received, would indeed be agricultural income; but the additional interest charged for late payment is not "rent or revenue derived from land" in the sense Section 2(1A) requires, and is instead taxed as Income from …

Treating interest on arrears of agricultural rent the same as the rent itself, on the reasoning that it 'relates to' agricultural land — the exemption is narrowly for rent/revenue FROM the land, not fo …