The study aimed to examine the inequality in income among various categories of households of rural Punjab. An attempt was made to compare and contrast the relative shares of the different components of income items in the total income of the households across the different rural household categories, along with examining the inequalities in the distribution of income prevailing therein. The analysis showed that an average rural household earns around one and a half lakh rupees annually in rural Punjab. There were considerable variations in the income levels earned among the different rural household categories. The farm business income is the most important component of household income for the farmer households, followed by livestock, pension and salary from private jobs. There were considerable differences in the range of average per capita and the average household incomes of the various rural categories. The per capita income earned by large farm households was 10.79 of times the per capita income earned by agricultural labour households.