The Central Government has provided a significant update in the recent notification vide number 123/2024 regarding the applicability of Section 194N of the Income-tax Act, 1961. This update, effective from 1st December 2024, exempts specific entities from the provisions of Section 194N, which deals with TDS on cash withdrawals exceeding certain thresholds.
Key Details of the Notification
Under the powers conferred by the fifth proviso to Section 194N of the Income-tax Act, 1961, and in consultation with the Reserve Bank of India, the Central Government has specified that Section 194N shall not apply to the following entities:
- Foreign Representations approved by the Ministry of External Affairs of the Govt. of India
- Diplomatic Missions
- Agencies of the United Nations
- International Organizations
- Consulates and Offices of Honorary Consuls
These entities are exempt from paying taxes in India under the provisions of the Diplomatic Relations (Vienna Convention) Act, 1972 (43 of 1972), and the United Nations (Privileges and Immunities) Act, 1947 (46 of 1947).
Applicability of the Exemption
The exemption is applicable to the above-listed entities as they hold a special status under international conventions and agreements. This status ensures that their operations in India are not subjected to local taxation, aligning with diplomatic principles and global norms.
This update ensures compliance with international agreements while streamlining the application of Section 194N for specific exempt entities.
Download the Official Notification
To read the full details of Notification No. 123/2024, dated 28th November 2024, you can download the official document from the following link:
Download Notification Document