Quick Summary
In a major relief aimed at bolstering India's International Financial Services Centres (IFSCs), the Central Government has issued a notification exempting tax deduction at source (TDS) on certain payments made to units operating in IFSCs. The notification, issued under Section 197A(1F) read with Sec
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FAQ :
The TDS exemption for eligible IFSC units will come into effect from July 1, 2025.
Payments such as professional consultancy, interest income, technical fees, lease rentals, commissions, and management fees are exempt from TDS.
Eligible units include BATF service providers, broker-dealers, finance companies, fund management entities, clearing corporations, depositories, and stock exchanges recognised under the IFSCA framework, provided they have opted for deductions under Section 80LA.
Eligible IFSC units must submit an annual 'statement-cum-declaration' (Form No. 1) to the payer to claim the TDS exemption benefit.
The primary objective is to enhance post-tax returns, ease compliance burdens, and attract more global players to establish a presence in India's IFSCs, positioning them as competitive global financial hubs.
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