banner_ad

Regarding cash purchase limit for purchase from interstate farmers.

Tax queries 417 views 4 replies

I want to know how much cash payment can be made to interstate farmers for purchase of agriproduce?

Replies (4)
Less then 2 Lacs

Is 2 lakhs per day limit, or i can pay to multiple farmers following 2 lakhs per day limit payment to single farmer.

Its per farmer per day per event... Less then 2 lakhs can be given in cash.

Section 269ST prohibits any person to receive an amount of Rs.2 lakh and above in cash:

  • In aggregate from a person in a day, or 
  • In a single transaction, or 
  • In respect of transactions relating to one event or occasion from a person. 

This section will not apply to-

  • Government
  • any banking company
  • post office savings bank
  • co-operative bank
  • other persons/receipts as may be notified
  • Transactions referred to in section 269SS (attracted when we accept loan from any person) will be excluded from the scope of the new section 269ST.

However there is a exception to section 271DA; According to section 271DA if person proves that there were good and sufficient reasons for contravention of section 269ST then no person shall be liable.

However, in case you are making payment of/above 2,00,000 to any farmer, Provisions of new Section 269ST will be applicable and Penalty can be levied on farmer for accepting payment above 2,00,000 in cash since no exemption is given to farmers under Section 269ST. (refer:            Circular No. 27/2017 Dated 3rd November 2017)

269st applicable to recipient and not payer. as per section 40A(3) ,you are not supposed to make payments in excess of 10000 in cash. however, since the payments are made to farmers, there's no limit for you but the farmers are not supposed to receive cash in excess of 2 lakhs


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
Featured 14 April 2026
GST CONSULTANT

Abhishek G Agrawal & Co.

Korba

CA Final

View Details
Company
Featured 13 April 2026
GST CONSULTANCY

Abhishek G Agrawal & Co.

Korba

CA Final

View Details
Company
Featured 28 March 2026
Accountant

Ashok Amol & Associates

New Delhi

B.Com

View Details
Company
Featured 28 March 2026
CA Final

Ashok Amol & Associates

New Delhi

CA Final

View Details
Company
Featured 02 May 2026
Senior Executive

hitesh chandwani & co

Pune

B.Com

View Details
Company
Featured 29 April 2026
Manager- Finance and Compliance

Naveen Fintech Pvt Ltd

Kolkata

CA Inter

View Details