Notification for Non-Deduction of Tax at Source on Specified Payments to Units in International Financial Services Centres (IFSCs) under the provisions Income-tax Act, 2025

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.... (IFSC Unit) (Payee) Nature of receipt Relevant TDS provisions as per Income- tax Act, 2025 (1) (2) (3) (4) 1. Banking Unit Interest income on External Commercial Borrowings /Loans Section 393(2) [Table:  S. No. 17] Professional fees Section 393(1) [Table: S. No. 6(iii)] Referral fees Section 393(1) [Table: S.No. 1(ii)] Brokerage income Section 393(1) [Table: S.No. 1(ii)] Commission income on factoring and forfaiting services Section 393(1) [Table: S.No. 1(ii)] 2. IFSC Insurance Intermediary office Insurance commission Section 393(1) [Table: S.No. 1(i)] 3. Finance Company Interest income on External Commercial Borrowings /Loans Section 393(1) [Table: S.No. 5(ii ) & 5(iii)] / Section 393(2) [Table: S.No. 17] Dividend income Section 393(1) [Table: S. No. 7] Commission income on factoring and forfaiting services Section 393(1) [Table:  S.No. 1(ii)] 4. Finance Unit Interest income on External Commercial Borro....

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....ational Financial Services Centres Authority (Capital Market Intermediaries) Regulations, 2021 and the provisions of regulations 3, 5, 6 and 7 of the said regulations shall apply to the International Financial Services Centre Unit specified against serial number 10 under column (2) of the above table subject to registration of such credit rating agencies by the International Financial Services Centres Authority; (d) "custodian" shall have the same meaning as assigned to it in clause (l) of sub-regulation (1) of regulation 2 of the International Financial Services Centres Authority (Capital Market Intermediaries) Regulations, 2021 and the provisions of regulations 3, 5, 6 and 7 of the said regulations shall apply to the International Financial Services Centre Unit specified against serial number 9 under column (2) of the said table; (e) "debenture trustee" shall have the same meaning as assigned to it in clause (m) of sub-regulation (1) of regulation 2 of the International Financial Services Centres Authority (Capital Market Intermediaries) Regulations, 2021 and the provisions of regulations 3, 5, 6 and 7 of the said regulations shall apply to the International Fin....

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.... (m) "investment adviser" shall have the same meaning as assigned to it in clause (t) of sub-regulation (1) of regulation 2 of the International Financial Services Centres Authority (Capital Market Intermediaries) Regulations, 2021 (except the persons covered under proviso to clause (f) of sub-regulation (1) of regulation 3), and the provisions of regulations 3, 5, 6 and 7 of the said regulations shall apply to the International Financial Services Centre Unit specified against serial number 7 under column (2) of the said table; (n) "investment banker" shall have the same meaning as assigned to it in clause (u) of sub-regulation (1) of regulation 2 of the International Financial Services Centres Authority (Capital Market Intermediaries) Regulations, 2021 and the provisions of regulations 3, 5, 6 and 7 of the said regulations shall apply to the International Financial Services Centre Unit specified against serial number 11 under column (2) of the said table; (o) "registered distributor" shall have the same meaning as assigned to it in clause (dda) of sub-regulation (1) of regulation 2 of the International Financial Services Centres Authority (Capital Market In....

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.... particulars of all the payments made to payee on which tax has not been deducted in pursuance of this notification in the statement of deduction of tax referred to in section 397(3)(b) of the said Act read with rule 219 of the Income-tax Rules, 2026. (3) The above relaxation shall be available to the payee only during the said twenty consecutive tax years as declared by the payee in the said Form for which deduction under section 147 is being opted and the payer shall be liable to deduct tax on payments as referred above for any other year. 3. The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall lay down procedures, formats and standards for ensuring secure capture and transmission of data and uploading of documents and they shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies. 4. This notification shall be deemed to have come into force on the 1st day of April, 2026. FORM No. 1(N) Statement-cum-declaration to be furnished by a Unit of International Financial Services Centre (payee) to the payer PART-A  1.  Name ....