Govt. Notifies List of Payments Made to IFSC Units on Which No TDS is Required

Notification No. 28/2024, dated 07-03-2024

Exercising the power contained under section 197A(1F) read with section 80LA(2), the Central Government has notified the list of payments on which no tax deduction shall be made under the provisions of the Income-tax Act if payment is made by any ‘payer’ to a person being a Unit of International Financial Services Centre (IFSC).

These IFSC Units include the Banking Unit, IFSC Insurance Intermediary Office, Finance Company, Finance Unit, Fund Management entity, Broker Dealer, Investment advisor, Registered Distributor, Credit rating agency, Investment banker, etc. The notification enlists various types of payments for each category of IFSC Unit, including interest, dividend, commission, professional fees, etc., on which tax is deducted under sections 194A, 194D, 194H, or 195.

To avail of this benefit, the IFSC unit is required to furnish a declaration in Form No. 1 to the payer giving details of previous years relevant to the ten consecutive assessment years for which such unit opts for claiming deduction under section 80LA(1A) and 80LA(2). Further, the payer is required to furnish the particulars of all the payments made on which tax has not been deducted in the statement of deduction of tax referred to under section 200(3).

It is to be noted that the relaxation shall be available to the IFSC Unit only during the said previous years relevant to the ten consecutive assessment years as declared in Form No. 1, for which deduction under section 80LA is being opted.

Click Here To Read The Full Notification