Section 10(31): Income Tax Exemption for Rubber, Coffee and Cardamom Subsidies
Section 10(31) of the Income-tax Act, 1961 provides a specific income tax exemption for qualifying subsidies connected with the cultivation of rubber, coffee, cardamom and certain other notified commodities in India. The exemption concerns eligible subsidy receipts, not the whole income of a plantation or processing business.
Eligible assessee: A person carrying on the business of growing and manufacturing rubber, coffee, cardamom or a notified commodity in India.
Income covered: Qualifying subsidy received from or through the specified board or authority under an approved scheme.
Exemption: The qualifying subsidy amount, subject to the statutory conditions.
Documentation: Evidence of the approved scheme, subsidy receipt and the prescribed certificate.
What does Section 10(31) provide?
Section 10 of the Income-tax Act, 1961 lists categories of income excluded from total income. Clause (31) addresses a subsidy received by an assessee carrying on the business of growing and manufacturing rubber, coffee, cardamom or another commodity specified by the Central Government, in India, under the relevant approved scheme for replantation, replacement, rejuvenation or consolidation of the area used for cultivation.
The exemption is tied to the nature, source and purpose of the subsidy. A routine trading receipt, sale proceeds or an unrelated government grant is not automatically exempt under this clause.
Who is eligible?
The assessee must be engaged in growing and manufacturing rubber, coffee, cardamom or another commodity covered by a relevant Central Government notification. The assessee may be an individual, firm, company or another taxable person if the statutory requirements are satisfied. Merely buying and selling these commodities, without meeting the specified business requirement, does not establish eligibility.
| Eligible assessee | An assessee carrying on the business of growing and manufacturing rubber, coffee, cardamom or another notified commodity in India. |
|---|---|
| Nature of receipt | Subsidy paid through the applicable commodity board or other prescribed source under a qualifying scheme. |
| Qualifying purpose | Replantation or replacement of plants, rejuvenation, or consolidation of areas used for cultivation, as covered by the scheme. |
| Amount exempt | The qualifying subsidy received, rather than all profits or other income of the assessee. |
| Supporting document | Certificate or other evidence from the relevant board or authority and the applicable approved-scheme documentation. |
Commodities and relevant boards
Rubber
For eligible rubber growers and manufacturers, subsidies associated with approved plantation renewal or improvement schemes may be relevant. The Rubber Board publishes sector information and applicable schemes.
Coffee
Qualifying coffee plantation subsidies must be evaluated under the statutory provision and the particular scheme. Refer to the Coffee Board of India for official programme information.
Cardamom and other notified commodities
Cardamom-related schemes may be administered through the Spices Board India. For other commodities, a valid Central Government notification and scheme are essential; the exemption cannot be assumed to apply to every plantation crop.
Conditions for claiming the exemption
- Eligible business: The assessee carries on growing and manufacturing of the specified commodity in India.
- Eligible commodity: The subsidy relates to rubber, coffee, cardamom or another commodity specifically notified for the provision.
- Approved scheme: The subsidy is paid under the scheme and through the board or authority contemplated by the law.
- Specified agricultural purpose: The assistance is for replantation, replacement, rejuvenation or consolidation of cultivation areas within the scheme's scope.
- Certificate and compliance: Obtain the relevant certificate from the board or authority and comply with the requirement to furnish it to the tax authority in the manner applicable to the relevant year.
Important: Do not treat all subsidies or the full business income as exempt. Verify the scheme approval, commodity notification, payment source and certificate requirements before claiming the benefit.
Meaning of key terms
Replantation or replacement generally refers to replacing old, unproductive or damaged plants with new planting material in accordance with the approved scheme. Rejuvenation concerns restoration or improvement of existing cultivation. Consolidation refers to measures concerning the area under cultivation where the scheme specifically provides for them. The applicable scheme determines the precise activities and expenditure supported.
Illustrative examples
Example 1: A rubber plantation undertaking receives an approved replantation subsidy through the competent board. The receipt may qualify for the Section 10(31) exemption if the assessee, scheme, purpose and documentation satisfy the law applicable to that year.
Example 2: A coffee trader receives a grant for a retail showroom. The trader cannot claim exemption under this clause merely because coffee is the commodity traded; the prescribed growing-and-manufacturing and scheme requirements must be met.
Example 3: A cardamom grower receives financial assistance for an activity not covered by the approved scheme. That receipt should not be classified as exempt under Section 10(31) without establishing the statutory conditions.
Certificate and return-of-income records
The historical provision requires a certificate from the concerned board or authority concerning the subsidy. Maintain the sanction letter, scheme details, certificate, payment advice, bank statement, expenditure records and relevant books of account. The original page referred to furnishing the certificate with the income tax return; the precise procedure should be checked against the statutory wording and electronic filing rules applicable to the relevant assessment or tax year.
Income-tax Act, 2025: application from 1 April 2026
Section 10(31) is the familiar citation in the Income-tax Act, 1961. The Income-tax Act, 2025 took effect on 1 April 2026. For tax year 2026-27 onward, consult the corresponding exemption provision and transitional rules of the 2025 Act. For earlier periods, apply the 1961 Act and amendments relevant to the assessment year. Do not assume the old numbering continues under the new legislation.
Frequently asked questions
Does Section 10(31) exempt the entire income of a rubber or coffee business?
No. The historical provision exempts the qualifying subsidy receipt, not the business's sales, profits or other income.
Are all plantation subsidies exempt?
No. The commodity, scheme, subsidy source and prescribed purpose must satisfy the provision.
Is a subsidy certificate important?
Yes. The clause includes a certificate requirement. Preserve the certificate and comply with the filing procedure applicable to the relevant year.
Can a coffee dealer claim the exemption?
Merely dealing in coffee does not satisfy the specified requirement of carrying on the business of growing and manufacturing the commodity in India.
What should be checked for income arising from April 2026?
Consult the Income-tax Act, 2025, corresponding exemption rules and relevant transitional provisions.
Official legal sources and related articles
- Income Tax Department: Income-tax Act, 1961 (historical Section 10(31)).
- India Code: Income-tax Act, 2025 and central legislation.
- Income Tax Department e-Filing Portal.
- Rubber Board, Coffee Board and Spices Board.
See also Section 10(30): tea subsidy exemption, income exempt under Section 10, tax-free income guides and Chapter VI-A deductions.
General information only. The exemption depends on the statute, notification, scheme and evidence applicable to the particular year.