In a significant update, the Central Board of Direct Taxes (CBDT) has issued Notification No. 115/2024, dated October 16, 2024, exempting the Reserve Bank of India (RBI) from the requirement of tax collection at source (TCS) under Section 206C(1F) of the Income Tax Act, 1961. This exemption applies to payments received by the RBI and is effective from the date of the notification's publication in the Official Gazette.
Section 206C(1F) mandates the collection of tax at source on the sale of motor vehicles worth over Rs 10 lakh. However, with this new notification, any payments made to the RBI are now excluded from this requirement, streamlining financial transactions involving the central bank. This move is expected to simplify compliance for entities interacting with the RBI.
Tax professionals and businesses engaging with the RBI should take note of this change to ensure compliance with the revised tax collection requirements.
Official text of the notification is as follows
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 16th October, 2024
(INCOME-TAX)
S.O. 4545(E).— In exercise of the powers conferred by sub-section (12) of section 206C of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies that no collection of tax shall be made under sub-section (1F) of section 206C of the said Act on any payment received from the Reserve Bank of India.
2. This notification shall come into force on the date of its publication in the Official Gazette.
[No. 115/2024/F. No. 370142/21/2024-TPL]
KHUSHBOO LATHER, Under Secy.
CAclubindia
