TIRUCHY: Thousands of farmers in delta districts, who are getting ready to prepare their fields for samba cultivation, are facing trouble in accessing crop loans and other funds as the income tax department has frozen the bank accounts of many Primary Agriculture Cooperative Credit Societies (PACCS) citing non-compliance with TDS (tax deducted at source) rules.
While 51 of 84 PACCS in Karur district are facing the issue, at least 10 PACCS in Tiruchy district have received the notice from the I-T department, sources said.
Since each society, on an average, has 3,000 members, thousands of farmers may have lost access to agricultural credit, sources added. Tamil Nadu has a total of 4,451 PACCS.
The main objective of these credit societies is to provide agricultural and non-agricultural loans to farmers who are enlisted as members.
Delta districts, which include Thanjavur and Tiruchy, have a total of 1,006 societies. Agricultural credit includes loans for crops and seeds, and for allied purposes such as buying of farm machinery, irrigation equipment, and milch animals.
I-T action hits farmers awaiting crop loans in delta districts
Non-agricultural credit includes loans for housing, income generation activities of self-help groups, and other non-farm sectors. These societies also undertake distribution and sale of agriculture inputs such as fertilizers and seeds. They also run ration shops.
According to sources, 10% TDS has to be deducted if cash transactions exceed Rs 1 crore in a bank account. The issue may have arisen due to non-compliance with this norm by the PACCS in the past. Since the cash transaction limit was increased to Rs 2 crore in 2021-22 financial year, there has been no issues with respect to tax returns filed for the last few years. The matter has already
been brought to the attention of the Central Board of Direct Taxes, and it will be resolved, J Radhakrishnan, secretary of cooperation department, said.
The secretary of a credit society in Tiruchy said, “I have nearly 30 years of experience as secretary of a credit society. This is the first time we are facing such an issue. We have been following the rules by filing income tax returns promptly through our auditors. But citing some shortcomings, the I-T department has rejected our appeals and our back accounts have been frozen,” he said.
Hundreds of farmers who are members of the society are awaiting crop loans and several others waiting to retrieve their pledged jewels are facing trouble, he said. N Veerasekaran, state spokesperson of Bharatiya Kisan Sangh, said that as farmers are busy raising nurseries and preparing fields to transplant samba paddy, the freezing of accounts of PACCS has left them in deep trouble.