The Coffee Board has written to the Union government seeking exemption for coffee growers from tax deducted at source for cash withdrawals.
In a memorandum to the government, the Board pointed out that according to an amendment to the Income Tax Act, 2 % was tax deducted at source for aggregate cash withdrawal of ₹20 lakh and 5 % was tax deducted at source for withdrawals of ₹1 crore if the recipient had not filed returns for three assessment years. However, commission agents or traders operating under Agriculture Produce Market Committee and registered under any law relating to agriculture produce market of the respective State were exempted from the amendment.
Coffee growers, present in large numbers in Karnataka, Kerala and Tamil Nadu, had 70 % of the cost as the labour component and large number of migrants as permanent and casual workers. They need to withdraw cash to pay wages to these workers and to buy inputs for the crop. The coffee growers, most of who were small-scale, should be exempted from tax deduction at source for cash withdrawals, said the Board.
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