Quick Summary
In a significant move to bolster micro and small enterprises (MSEs), the Central Board of Direct Taxes (CBDT) has issued Notification No. 128/2024, dated December 18, 2024. The notification provides that no Tax Deducted at Source (TDS) shall be applied to payments received by the Credit Guarantee Fu
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FAQ :
The CBDT has exempted the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) from Tax Deducted at Source (TDS) on payments it receives.
The exemption took effect from December 18, 2024, the date of the notification's publication in the Official Gazette.
The primary objectives are to reduce compliance burdens for businesses and provide better liquidity to micro and small enterprises that utilise credit guarantee schemes.
The exemption is provided under sub-section (1F) of Section 197A of the Income-tax Act, 1961, and aligns with clause (46B) of Section 10 of the Act.
By eliminating TDS on payments to the CGTMSE, the move is expected to enhance operational efficiency and financial stability for MSEs that avail of credit guarantee schemes.
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