{"id":316939,"date":"2024-03-14T12:00:06","date_gmt":"2024-03-14T06:30:06","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=316939"},"modified":"2024-03-14T11:56:16","modified_gmt":"2024-03-14T06:26:16","slug":"cbdt-issues-notification-exempting-some-services-from-paying-tax-legal-news","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2024\/03\/14\/cbdt-issues-notification-exempting-some-services-from-paying-tax-legal-news\/","title":{"rendered":"CBDT exempts TDS for IFSC Units"},"content":{"rendered":"<div style=\"text-align: justify; line-height: 150%;\">\n<p style=\"margin-bottom: 3%;\">On 7-3-2024, the Central Board of Direct Taxes issued a notification declaring that no deduction of tax will be made under the provisions of <a href=\"http:\/\/www.scconline.com\/DocumentLink\/7VAV83wS\" target=\"_blank\" rel=\"noopener\">Income Tax Act, 1961<\/a> in respect of the payments of certain nature of receipts of International Financial Services Centre (&#8216;IFSC&#8217;) made by any payer to a person being a Unit of IFSC. The provisions will come into force on 1-4-2024.<\/p>\n<p style=\"font-weight: bold;\">Key Points:<\/p>\n<ol style=\"list-style-type: decimal;\">\n<li>\n<p style=\"font-weight: bold;\">Exempted Nature of Receipts from Payment of taxes:<\/p>\n<ul style=\"list-style-type: disc;\">\n<li>\n<p style=\"font-weight: bold;\">Banking Unit-<\/p>\n<p style=\"margin-left: 18pt; text-indent: -18pt;\">&#10003; Interest income on External Commercial Borrowings \/Loans<\/p>\n<p style=\"margin-left: 18pt; text-indent: -18pt;\">&#10003; Professional fees<\/p>\n<p style=\"margin-left: 18pt; text-indent: -18pt;\">&#10003; Referral fees<\/p>\n<p style=\"margin-left: 18pt; text-indent: -18pt;\">&#10003; Brokerage income<\/p>\n<p style=\"margin-left: 18pt; text-indent: -18pt; margin-bottom: 2%;\">&#10003; Commission income on factoring and forfaiting services<\/p>\n<\/li>\n<li>\n<p><span style=\"font-weight: bold;\">IFSC Insurance Intermediary office-<\/span> Insurance commission<\/p>\n<\/li>\n<li>\n<p style=\"font-weight: bold;\">Finance Company-<\/p>\n<p style=\"margin-left: 18pt; text-indent: -18pt;\">&#10003; Interest income on External Commercial Borrowings \/Loans<\/p>\n<p style=\"margin-left: 18pt; text-indent: -18pt;\">&#10003; Dividend income<\/p>\n<p style=\"margin-left: 18pt; text-indent: -18pt; margin-bottom: 2%;\">&#10003; Commission income on factoring and forfaiting services<\/p>\n<\/li>\n<li>\n<p style=\"font-weight: bold;\">Finance Unit-<\/p>\n<p style=\"margin-left: 18pt; text-indent: -18pt;\">&#10003; Interest income on External Commercial Borrowings \/Loans<\/p>\n<p style=\"margin-left: 18pt; text-indent: -18pt;\">&#10003; Dividend income<\/p>\n<p style=\"margin-left: 18pt; text-indent: -18pt; margin-bottom: 2%;\">&#10003; Commission income on factoring and forfaiting services<\/p>\n<\/li>\n<li>\n<p><span style=\"font-weight: bold;\">Fund Management entity-<\/span> Professional fee<\/p>\n<\/li>\n<li>\n<p><span style=\"font-weight: bold;\">Broker Dealer-<\/span> Dividend<\/p>\n<\/li>\n<li>\n<p><span style=\"font-weight: bold;\">Investment advisor-<\/span> Investment advisory fee<\/p>\n<\/li>\n<li>\n<p><span style=\"font-weight: bold;\">Registered Distributor-<\/span> Distribution fee and Commission fee<\/p>\n<\/li>\n<li>\n<p style=\"font-weight: bold;\">Custodian-<\/p>\n<p style=\"margin-left: 18pt; text-indent: -18pt;\">&#10003; Professional fee<\/p>\n<p style=\"margin-left: 18pt; text-indent: -18pt; margin-bottom: 2%;\">&#10003; Commission fee<\/p>\n<\/li>\n<li>\n<p><span style=\"font-weight: bold;\">Credit rating agency-<\/span> Credit rating fee<\/p>\n<\/li>\n<li>\n<p><span style=\"font-weight: bold;\">Investment banker-<\/span> Investment banker fee<\/p>\n<\/li>\n<li>\n<p><span style=\"font-weight: bold;\">Debenture trustee-<\/span> Trusteeship fee<\/p>\n<\/li>\n<li>\n<p><span style=\"font-weight: bold;\">International Trade Finance Service<\/span> or &#8220;ITFS&#8221;- Commission income<\/p>\n<\/li>\n<li>\n<p style=\"font-weight: bold;\">FinTech Entity-<\/p>\n<p style=\"margin-left: 18pt; text-indent: -18pt;\">&#10003; Technical fee\/Professional fee<\/p>\n<p style=\"margin-left: 18pt; text-indent: -18pt; margin-bottom: 2%;\">&#10003; Commission income<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<li>\n<p>The following will be the <span style=\"font-weight: bold;\">services qualifying under this notification<\/span>:<\/p>\n<ul style=\"list-style-type: disc;\">\n<li>\n<p>IFSC Authority (Banking) Regulations, 2020;<\/p>\n<\/li>\n<li>\n<p>IFSC Authority (Insurance Intermediary) Regulations, 2021;<\/p>\n<\/li>\n<li>\n<p>IFSC Authority (Finance Company) Regulations, 2021;<\/p>\n<\/li>\n<li>\n<p>IFSC Authority (Fund Management) Regulations, 2022;<\/p>\n<\/li>\n<li>\n<p>IFSC Authority (Capital Market Intermediaries) Regulations, 2021;<\/p>\n<\/li>\n<li>\n<p>IFSC Circular dated the 9-7-2021;<\/p>\n<\/li>\n<li>\n<p>IFSC Circular dated 27-4-2022.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<li>\n<p style=\"font-weight: bold;\">Conditions to be followed for the provisions to be exercised:<\/p>\n<ul style=\"list-style-type: disc;\">\n<li>\n<p>Payee will have to furnish a statement-cum-declaration in Form No. 1 to the Payer giving details of previous years relevant to the 10 consecutive assessment years for which the Payee opts for claiming deduction under Section 80LA sub-sections (1A) and (2) of the Income-tax Act.<\/p>\n<\/li>\n<li>\n<p>Payer will not deduct tax on payment made or credited to payee after the receipt of copy of statement-cum-declaration.<\/p>\n<\/li>\n<li>\n<p style=\"margin-bottom: 3%;\">The relaxation will be available to payee only during the relevant previous years up to 10 consecutive assessment years.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p style=\"font-style: italic;\">The provisions will come into force on 1-4-2024.<\/p>\n","protected":false},"author":67515,"featured_media":316943,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[4,1193],"tags":[29414,15151,2592,39219,2824,66364],"class_list":["post-316939","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legislationupdates","category-notifications","tag-cbdt","tag-central-board-of-direct-taxes","tag-Income_Tax","tag-international-financial-services-centre","tag-Ministry_of_Finance","tag-notax-deductions"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Exemption from tax deduction | SCC Times<\/title>\n<meta name=\"description\" content=\"CBDT issued notification declaring that no deduction of tax will be made under the provisions of 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