Select payments to units in IFSC exempted from TDS

New Delhi: The interest on external commercial borrowing, professional fees, referral fees, and dividend income to finance companies and banking units, established in IIFC will be exempted from the tax deducted at source (TDS) from the next financial year.

The Centre on Friday notified 14 categories of payments made by any payer to IFSC units on which no TDS is required. This exemption was so far available only to payments associated with the leasing of ships, and aircraft among others. The exemption will be applicable for 10 years effective April 1, 2024.

"Waiver of withholding requirement helps mitigate the cash trap IFSC units were to face", said Sumit Singhania, Partner, Deloitte India said.