IT Rules not to hinder cash payment up to Rs 2 lakhs to farmers

Bhopal: Clarifying doubts of grain traders the Central Board of Direct Taxes under Revenue Department of the Union Ministry of Finance that the traders can purchase farmers produce up to Rs 2 lakhs by cash under Income Tax rules. In this process of payment, the Income Tax Rules will not be a hindrance.

It may be noted that Chief Minister Shivraj Singh Chouhan had urged Union Minister of Finance Arun Jaitley to clear the doubts regarding cash payment on purchase of produce from farmers by grain traders under Bhavantar Bhugtan Yojana implemented in the state. Later Union Ministry of Finance had issued a circular on November 3, 2017 in this regard. As per the circular, the grain trader can make cash payment up to Rs 2 lakhs to the farmer on purchase of his produce.

Rule 6DD of the Income Tax Rules carves out payments made for purchase of agricultural produce to the cultivators of the produce under provisions of Section 40-A (3) of Income Tax Act- 1961. Therefore, any cash sale of an amount of Rs 2 lakh or more by a cultivator of agricultural produce is prohibited under Section 269ST of the Act.

Also the provisions related to quoting of PAN or furnishing of Form No. 60 do not apply to the sale transaction of Rs 2 lakh or less.-Windowtonews