Date: 28-Nov-2024Category: Extra OrdinaryState: Union GovernmentCountry: India
Examination of the issue regarding exemption of Foreign representations approved by the Ministry of External Affairs from tax deduction at source us 194N of the Income tax Act 1961
This gazette notification, issued by the Ministry of Finance, specifies that certain foreign representations in India will be exempt from the provisions of Section 194N of the Income-tax Act, 1961.
Section 194N of the Income-tax Act deals with Tax Deduction at Source (TDS) on cash withdrawals exceeding a certain limit. This notification provides an exemption from this TDS requirement for specific entities.
Key Changes
Section 194N of the Income-tax Act, 1961 will not apply to Foreign Representations duly approved by the Ministry of External Affairs of the Government of India.
The exemption applies to Diplomatic Missions, agencies of the United Nations, International Organisations, Consulates and Offices of Honorary Consuls.
These entities are exempt from paying taxes in India as per the Diplomatic Relations (Vienna Convention) Act 1972 and the United Nations (Privileges and Immunities) Act 1947.
The notification is effective from December 1, 2024.
Impact Analysis
Impact on Foreign Representations
This exemption is in line with international conventions and treaties that grant tax exemptions to these entities.
Impact on Banks and Financial Institutions
Banks must be aware of the effective date of the notification, December 1, 2024, to ensure compliance.
Impact on Government
This notification reinforces India's commitment to international diplomatic norms and treaties.
Suggested Action Items
The Ministry of External Affairs should ensure that all approved foreign representations are aware of this exemption.
Key Entities Referenced
Income-tax Act, 1961: The primary legislation governing income tax in India. Section 194N deals with TDS on cash withdrawals.
Ministry of Finance: The government ministry responsible for financial matters, including taxation, that issued this notification.
Ministry of External Affairs: The government ministry responsible for foreign relations, which approves foreign representations in India.
Reserve Bank of India: The central bank of India, which was consulted before issuing this notification.
Diplomatic Relations (Vienna Convention) Act 1972: Indian legislation incorporating the Vienna Convention on Diplomatic Relations, which grants tax exemptions to diplomatic missions.
United Nations (Privileges and Immunities) Act 1947: Indian legislation granting privileges and immunities to the United Nations and its agencies.
Diplomatic Missions: Embassies and High Commissions representing foreign governments in India.
Agencies of the United Nations: Organizations affiliated with the United Nations operating in India.
International Organisations: Organizations with international membership, scope and presence in India.
Consulates: Offices representing a foreign country in a specific city in India.
Offices of Honorary Consuls: Offices of individuals appointed by a foreign country to represent their interests in India on a non-professional basis.
रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
सी.जी.-डी.एल.-अ.-28112024-259001
CG-DxLx-xEG-I2D8H1x1x2x0 24-259001
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असाधारण
EXTRAORDINARY
भाग II—खण् ड 3—उप-खण्ड (ii)
PART II—Section 3—Sub-section (ii)
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
सं. 4731] नई दिल्ली, बहृ स्ट्प जतिार, निम्ब र 28, 2024/अग्रहायण 7, 1946
No. 4731] NEW DELHI, THURSDAY, NOVEMBER 28, 2024/AGRAHAYANA 7, 1946
जित्त मत्रं ालय
(रािस्ट्ि जिभाग)
अधिसचू ना
नई दिल् ली, 28 निम् बर, 2024
आयकर
का.आ. 5121(अ).—केंद्रीय सरकार, आयकर अजधजनयम, 1961 (1961 का 43) (जिसे इस अजधसूचना म ें इसके
पश्चात् उक्त अजधजनयम कहा गया ह)ै की धारा 194ढ के पांचिें परंतुक द्वारा प्रित्त िजक्तयों का प्रयोग करत े हुए, भारतीय
ररििव बैंक के साथ परामिव करने के पश्चात, यह जनर्िष्टव करती ह ै दक उक्त अजधजनयम की धारा 194ढ के प्रािधान भारत
सरकार के जििेि मंत्रालय द्वारा जिजधित् अनुमोदित जििेिी अभ्यािेिनों पर लाग ू नहीं होंगे, जिनमें रािनजयक जमिन,
संयुक्त राष्ट्र की एिेंजसयां, अंतरावष्ट्रीय संगठन, िाजणज्य ितू ािास और मानि िाजणज्यितू ों के कायावलय िाजमल हैं, जिन्ह ें
रािनजयक संबंध (जियना कन्िेंिन) अजधजनयम 1972 (1972 का 43) और संयक्तु राष्ट्र (जििेषाजधकार और उन्मुजक्त)
अजधजनयम 1947 (1947 का 46) के अनुसार भारत में करों का भुगतान करन े से छूट प्राप्त ह।ै
2. यह अजधसूचना 1 दिसंबर, 2024 से लागू मानी िाएगी।
[अजधसूचना स.ं 123/2024/फा. स.ं 275/39/2021-आईटी(बी)]
रुबल ससंह, उप सजचि (आईटी-बिट)
7707 GI/2024 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)]
MINISTRY OF FINANCE
(Department of Revenue)
NOTIFICATION
New Delhi, the 28th November, 2024
INCOME-TAX
S.O. 5121(E).—In exercise of the powers conferred by the fifth proviso to section 194N of the Income-tax
Act, 1961 (43 of 1961) (hereafter in this notification referred to as the said Act), the Central Government after
consultation with the Reserve Bank of India, hereby specifies that the provisions of section 194N of the said Act shall
not apply to Foreign Representations duly approved by the Ministry of External Affairs of the Government of India
including Diplomatic Missions, agencies of the United Nations, International Organisations, Consulates and Offices
of Honorary Consuls which are exempt from paying taxes in India as per the Diplomatic Relations
(Vienna Convention) Act 1972 (43 of 1972) and the United Nations (Privileges and Immunities) Act 1947
(46 of 1947).
2. The notification shall be deemed to have come into force with effect from the 1st day of December, 2024.
[Notification No. 123/2024/F. No. 275/39/2021-IT(B)]
RUBAL SINGH, Dy. Secy. (IT-Budget)
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and Published by the Controller of Publications, Delhi-110054.