Notification: Tax Deduction Exemption for IFSC Units under IT Act; Effective April 2024

The Central Board of Direct Taxes (CBDT) has issued Notification No. 28/2024 dated March 07, 2024, announcing the exemption of Units within the International Financial Services Centre (IFSC) from tax deductions under various sections of the Income-tax Act, 1961. This exemption covers a range of incomes such as interest, professional fees, dividends, and commissions. Payments made by any entity to qualifying IFSC units, categorized under sectors including banking, insurance intermediaries, and finance companies, among others, will benefit from this exemption. However, IFSC units must comply with specific conditions and furnish necessary declarations to avail themselves of these exemptions, with effect from April 01, 2024.