The price of goods has increased many folds but the cash payment limit for the traders continues to remain old.
The Chhattisgarh Chamber of Commerce and Industry (CCCI) had drawn the attention of Union Finance Minister Pranab Mukherjee towards the disparity, anticipating that it will be addressed in the coming budget. The Chamber wants to increase the cash payment limit from Rs 20,000 to Rs 1 lakh.
According to the existing Income Tax rules, traders cannot purchase goods worth more than Rs 20,000 by paying cash. If the payment exceeds the limit, they had to make the payment either by cheque, draft or online cash transfer from the bank account.
“Over the period of time, the price of goods had increased many folds and hence the cash payment limit of Rs 20,000 was not practical in the present market,” CCCI General Secretary Jitendra Barlota said. The price of the goods that was worth Rs 20,000 had increased to Rs 1 lakh now, he said, adding that hence the Chamber had demanded to change the limit.
The cash payment limit has not been revised since last long time. “It is a very old limit and has not been revised,” said income tax lawyer Laxman Rathore. The move of income tax department to put a limit for cash purchase has been aimed to check tax evasion, he added.
The CCCI has also given tips to the Finance Minister for increasing saving among the individuals. Barlota said the Union Government should consider withdrawing the wealth tax and increasing the limit of investment under 80-C from Rs 1 lakh to Rs 2 lakh. This would help people saving more money, Barlota added.
