Amid reports of traders fearing to pay in cash under Madhya Pradesh government’s Bhavantar Yojana, the state today said the Central Board of Direct Taxes (CBDT) has clarified that traders can make cash payment up to Rs 2 lakh to cultivators after purchasing the farm produce. “The CBDT, under revenue department of the Union Ministry of Finance, has clarified in a circular that traders can purchase farmers’ produce up to Rs 2 lakh by cash under the Income Tax rules. In this process of payment, the Income Tax rules will not be a hindrance,” a release issued by MP’s public relations department said today. It said that Chief Minister Shivraj Singh Chouhan had earlier requested Union Finance Minister Arun Jaitley to clear the doubts regarding cash payment on purchase of produce from farmers by grain traders under the ‘Bhavantar Bhugtan Yojana’ implemented in the state.
Some media reports earlier said that traders were not paying more than Rs 10,000 in cash to the farmers under the state government’s Bhavantar Yojana, citing Income Tax rules. The Bhavantar Yojana is a direct benefit transfer (DBT) scheme under which farmers will be paid the difference between the ‘modal price’ (to be determined by the government) and the minimum support price (MSP) of crops.