The Central Board of Direct Taxes (CBDT) has issued three significant notifications under the Income-tax Act, 1961, aimed at tax relief and compliance facilitation, effective from January 1, 2025.
Key Highlights
1. Tax Exemption for Payments to National Credit Guarantee Trustee Company Limited
As per Notification S.O. 19(E), payments received by the National Credit Guarantee Trustee Company Limited, a government-established and financed entity managing credit guarantee funds, are exempt from income tax deductions under Chapter XVII. This move is expected to enhance the operations of credit guarantee schemes.
2. Exemption for Payments to Government-Managed Credit Guarantee Funds
Under Notification S.O. 20(E), payments to credit guarantee funds established and financed by the Central Government and managed by the National Credit Guarantee Trustee Company Limited will also be exempt from TDS (Tax Deducted at Source).
3. TDS Relaxation for International Financial Services Centre (IFSC) Units
Notification S.O. 21(E) introduces TDS exemptions under Section 194Q for transactions involving IFSC units, subject to specific compliance conditions. Buyers transacting with IFSC sellers will not need to deduct tax, provided the seller furnishes necessary declarations under Section 80LA of the Income-tax Act.
These measures aim to simplify tax compliance for businesses while supporting government-backed financial initiatives.
Official copy of the notification has been attached
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