CBDT notifies exemption from Withholding Tax for Payments Made to Units of International Financial Services Centre

The Central Board of Direct Taxes (CBDT) has issued a notification exempting certain payments made to units located in the International Financial Services Centre (IFSC) from the requirement of withholding tax (TDS). This is a major incentive aimed at boosting the business environment in the IFSC, located in Gujarat's GIFT City. The notification specifies the types of payments, such as interest and fees for technical services, that can be made to IFSC units without deducting tax at source. This will significantly improve the cash flow and reduce the compliance burden for both the IFSC units receiving the payment and the entities making the payment. The move is part of the government's broader strategy to promote the IFSC as a globally competitive hub for financial services by providing it with a favorable and simplified tax regime.