Producer Company Registration

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Under the Companies Act, 2013, a Producer Company was introduced, which provides an opportunity to the individuals engaged in producing activities (particularly by farming) to form a company.

Moreover, a producer company is a corporate entity whose objectives/activities are described in Section 518B.

Under Section 10(1) of the Income Tax Act, agricultural incomes are not subject to pay tax, yet, sometimes the exemptions are present, depending on the execution of the farming activities.

Moreover, its definition does not define any particular unique tax benefit

or exemptions that a producer company avails. However, concerning agricultural activities that the producer company executes, certain tax benefits and exemptions can be availed. 

For instance, under the Income Tax Act, income generated from selling the grown tea leaves is counted as agricultural income and is completely tax-free. On the contrary, if the same tea leaves are processed for manufacturing, then 60% of the income from such activity will be considered agriculture income. However, 40% will be taxed.

Thus, the tax benefit and exemption depending on the activities of a producer company.