Maharashtra farmers, traders wary of TDS on over Rs 1 crore cash withdrawals

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Pune | Published: September 7, 2019 3:50:31 AM

Traders in Lasalgaon deal in large volumes and end up completing transactions worth over `1 crore within a week

TDS, salary income, income tax, salary, Section 54EC bond, fixed deposit, money news ,tds on withdrawal, tds maharahtra farmersChandwad APMC chairman Atmaram Kumbharde said that while the move is positive, the government has to ensure that the TDS refund is given back in a couple of months to ensure better compliance.

The Centre’s decision to impose 2% tax deduction at source (TDS) on cash withdrawal from banks in excess of `1 crore in a year has left farmers and traders in Maharashtra’s Agriculture Produce Market Committees (APMCs) worried over issues like possible delay in payments and adverse impact on liquidity and sentiment in mandis.

Reacting to a notification that TDS will be levied by Central Board of Direct Taxes (CBDT) from September 1, Lasalgaon APMC chairman Jaydutta Holkar said farmers are worried that the move may give traders a lot of leeway to delay their payments. The 14-odd mandis in Nashik district have gone cashless from September 1.

Holkar said most traders in Lasalgaon deal in large volumes and end up completing transactions worth over `1 crore within a week. Although the TDS is meant to come back into traders’ accounts after about a year, most of them are not happy.

Raising farmers’ concerns, he pointed out that traditionally trading has predominantly been cash based and most farmers who come to mandis prefer to be paid in cash the same day.

“They have several expenses like diesel, purchase of seeds, fertilisers and even some things for their homes. At such times, they go back empty handed and have to wait for the amount to be realised in their accounts in a couple of days. In some cases, traders delay payments and farmers who are already cash-strapped end up being at the mercy of traders,” he explained.

He said the new rule is bound to hit transactions in mandis and its real impact would be felt when Kharif crop is brought to the market in October-November.

Chandwad APMC chairman Atmaram Kumbharde said that while the move is positive, the government has to ensure that the TDS refund is given back in a couple of months to ensure better compliance. For a trader who may do business worth `3 crore in a week, 2% TDS means his refund worth lakhs of rupees is tied up for a year, he pointed out.

Kumbharde said it may take another week or two for the software to be installed in most banks located in rural areas and the impact will be seen after that.

Traders in Saurashtra had recently protested the TDS move and suspended APMC transactions. However, traders in Vashi said that cash transactions of up to `2 lakh per day are allowed and there may not be much impact.

Federation of Associations of Maharashtra (FAM) president Mohan Gurnani said all cash is not black, therefore, every cash transaction should not be treated as a sham. While most traders would prefer e-payments or online payments, the government should take a practical view and understand that some cash transactions are unavoidable.

In addition to farmers, there are other stakeholders in mandis such as transporters and mathadi workers who receive payment in cash and this is hard earned money and not black money, he said.

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