The Central Board of Direct Taxes (CBDT), vide Notification No. 84/2024 dated November 27, 2024, has exempted certain entities from the provisions of Section 194N of the Income Tax Act, 1961.
The provisions of the notification will come into force from December 1, 2024.The Central Board of Direct Taxes (CBDT) has issued a notification exempting specific entities from the provisions of Section 194N of the Income Tax Act, 1961. This section requires TDS on cash withdrawals exceeding Rs. 1 crore (or Rs. 3 crores for co-operative societies) in a financial year.
Exempt Entities
The exemption applies to the following entities, provided they are approved by the Ministry of External Affairs (MEA) and are exempt from paying taxes in India:
- Foreign Representations
- Diplomatic Missions
- United Nations Agencies
- International Organizations
- Consulates and Honorary Consuls
Effective Date
This exemption will be effective from December 1, 2024.
Implications
- For Exempt Entities: Streamlined operations without TDS deductions on cash withdrawals.
- For Banks and Institutions: Necessary adjustments in compliance systems to exclude these entities.
- For Other Taxpayers: Provisions of Section 194N continue unchanged.
