Q.A tea company's Statement of Profit and Loss shows a composite profit of ₹25,00,000 for the previous year 2025-26 from growing and manufacturing tea in India, with no other income.

A quick reconciliation check confirms an apportionment computation has not lost or duplicated any part of the original profit.

1. Computing the taxable portion: applying Rule 8's fixed split for tea grown and manufactured in India: Business income (taxable) = 40% × ₹25,00,000 = ₹10,00,000. This ₹10,00,000 is the company's income chargeable to tax under the Income Tax Act for AY 2026-27 (assuming no other income and no deductions to apply for this illustration).
2. Verification by reconciliation: the agricultural portion, exempt under Section 10(1), is 60% × ₹25,00,000 = ₹15,00,000. Adding the two portions back together: ₹10,00,000 (business) + ₹15,00,000 (agricultural) = ₹25,00,000, which exactly equals the original composite profit figure. This confirms that the 60:40 split has been applied correctly and completely — since the two percentages always add up to 100%, the two resulting rupee amoun …

Reconciliation check: since the agricultural and business percentages under any of Rules 7B/8 always sum to 100%, adding the two computed rupee amounts back together must always equal the original composite incom …

Computing only the taxable business portion and stopping there, without the reconciliation check — the check costs one extra addition and catches a wrongly-applied percentage (e.g., using 25% instead of 40% …