The Ministry of Finance issued three Notifications dated January 02, 2024 under section 197A(1F) of the Income-tax Act, 1961. S.O. 19(E) exempts income-tax deduction on payments to the National Credit Guarantee Trustee Company Limited, a government-financed entity managing credit guarantee funds. S.O. 20(E) grants a similar exemption for payments to credit guarantee funds managed by the same company. S.O. 21(E) exempts buyers from deducting tax under section 194Q for purchases from IFSC Units, subject to sellers furnishing verified Form No. 1 for section 80LA claims. These exemptions aim to streamline financial transactions and are effective from their respective publication dates.
- The Central Government, under section 197A(1F) of the Income-tax Act, 1961, notifies that no income-tax deduction under Chapter XVII shall apply to payments received by the National Credit Guarantee Trustee Company Limited. This company, fully financed by the Central Government, operates credit guarantee funds also fully financed by the government, as per section 10(46B)(i). The notification is effective from its publication date in the Official Gazette.
- The Central Government, under section 197A(1F) of the Income-tax Act, 1961, exempts income-tax deduction under Chapter XVII for payments received by credit guarantee funds fully financed by the government and managed by the National Credit Guarantee Trustee Company Limited, as defined in section 10(46B)(ii). The exemption is effective from the date of publication in the Official Gazette.
- Under section 197A(1F), the government specifies no tax deduction under section 194Q for goods purchased from an International Financial Services Centre (IFSC) Unit, provided sellers submit a verified Form No. 1 detailing ten assessment years of section 80LA claims. Buyers must report such payments without tax deduction in Form 26Q. The exemption applies only during declared years. “Seller” is restricted to IFSC Units, and procedural details are overseen by tax authorities. Effective from January 1, 2025.
The Notifications can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2025/01/CBDT_Notifications__01_02_03.pdf
