Due to decreasing share of agriculture income in total income and increasing poverty, the importance of non-farm income has increased. So it is critical to analyze the current structure of non-farm income, its distribution into various non farm income sources and to decompose the non farm income inequality among different poverty bands and landholdings. Such an analysis will ensure that correct policy intervention can be made in the relevant sub sector. This study will help policy makers to design policies in accordance with the characteristics of the particular sub-sector. This research will also be a starting point for researchers to bring the research at aggregate level to the micro level in order the research to be more specific and meaningful.