a person engaged in business of selling of agricultural product on commission basis, i.e., purchase agricultural produce from farmers and sale it to market via KRISHI MANDI, now as per current notification, no expenses shall be paid in cash in excess of rs.10000. does this transaction of payment for purchase includes in that payment, can he pay rs. 165000 in cash to those farmers ?
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Cash payment
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Payment to a single farmer on a single day in aggregate should not exceed 10,000. Moreover, no disallowance u/s 40A(3) shall be made where payment is made for the purchase of agriculture or forest produce. (Rule 6DD)
This shall apply till limit of Rs. 200000/-. Once this limit is crossed section 269ST will come into operation. Unlike sec 40A(3), there is no exception provided in Sec 269ST. So please note this also.
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