TDS Relief for Diplomatic and International Entities Under Section 194N

Last updated: 29 November 2024

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This notification announces that the provisions of Section 194N of the Income-Tax Act, 1961, will not apply to certain foreign entities. These include Diplomatic Missions, United Nations agencies, International Organisations, Consulates, and Honorary Consul offices that have been approved by the Ministry of External Affairs. This exemption is granted to entities already exempt from Indian taxes under specific acts. The relief is effective from December 1, 2024.

MINISTRY OF FINANCE
(Department of Revenue)
NOTIFICATION
New Delhi, the 28th November, 2024
INCOME-TAX

S.O. 5121(E).—In exercise of the powers conferred by the fifth proviso to section 194N of the Income-tax Act, 1961 (43 of 1961) (hereafter in this notification referred to as the said Act), the Central Government after consultation with the Reserve Bank of India, hereby specifies that the provisions of section 194N of the said Act shall not apply to Foreign Representations duly approved by the Ministry of External Affairs of the Government of India including Diplomatic Missions, agencies of the United Nations, International Organisations, Consulates and Offices of Honorary Consuls which are exempt from paying taxes in India as per the Diplomatic Relations (Vienna Convention) Act 1972 (43 of 1972) and the United Nations (Privileges and Immunities) Act 1947 (46 of 1947).

2. The notification shall be deemed to have come into force with effect from the 1st day of December, 2024.

[Notification No. 123/2024/F. No. 275/39/2021-IT(B)]
RUBAL SINGH, Dy. Secy. (IT-Budget)

FAQ :

Section 194N of the Income-Tax Act, 1961, deals with the deduction of tax at source (TDS) on cash withdrawals above a certain threshold.

The relief applies to Foreign Representations approved by the Ministry of External Affairs, including Diplomatic Missions, United Nations agencies, International Organisations, Consulates, and Offices of Honorary Consuls.

These entities are exempt from paying taxes in India as per the Diplomatic Relations (Vienna Convention) Act 1972 and the United Nations (Privileges and Immunities) Act 1947.

This notification is deemed to have come into force with effect from December 1, 2024.

The notification was issued by the Ministry of Finance (Department of Revenue) and is in exercise of powers conferred by the fifth proviso to section 194N of the Income-tax Act, 1961.