Income statement is divided into two major categories, viz., income and expenses. Income includes cash receipts, capital sales of business and changes in inventory value of items produced in the farm. Expenses include operating and fixed expenses.

Farm Business Income (sometimes referred to as Farm Business Profit) is Total Farm Gross Margin less the sum of the Fixed Costs incurred, before any charges for unpaid labour or notional rent on owner occupied land. Alternatively it is Total Farm Output less the sum of Variable and Fixed Costs.

Net farm income is gross farm income less cash expenses and noncash expenses, such as capital consumption, perquisites to hired labor, and farm household expenses. It is a longer term measure of the ability of the farm to survive as a viable income-earning business.

(vi) insurance premiums paid for buildings and other agricultural assets on the farm; (vii) expenses for repair and maintenance of buildings and construction on the farm, as well as machines, tools, appliances, ditches, bridges, fences, roads etc.

In another decision, the High Court has held that the expenditure laid out or expended for the cultivation, upkeep or maintenance of immature plants can also be deducted from the agricultural income. It is considered necessary to provide that such deduction is not permissible.

Fertilizer and rent are most likely the two largest costs for all grain farms.

The ministry of agriculture's annual spending, as per the Budget Estimates in 2022-23, is ₹1.33 lakh crore. The “Budget at a glance” document for the 2022-23 Union Budget puts total agricultural and allied activities spending at ₹1.5 lakh crore.