New Delhi [India], Nov. 3 (ANI): The Central Board of Direct Taxes (CBDT) on Friday clarified that cash sale of agricultural produce by its cultivator to the trader for an amount less than Rs. 2 lakh will not result in any disallowance of expenditure under section 40A (3) of the Income-tax Act, 1961.
Addressing the issue via an official statement, the CBDT highlighted that produce of the aforementioned amount will not attract prohibition under section 269ST of the Act in the case of the cultivator, which provides penalty for any cash transaction above the value of Rs. 2 Lakh, equal to the transaction amount.
It will also not require the cultivator to quote his PAN/ or furnish Form No.60, the circular noted.
However, the notice comes in the wake of the CBDT receiving representations from the stakeholders regarding applicability of provisions of Income-tax Act, 1961 to cash the sale of agricultural produce by cultivators/agriculturists. (ANI)