The Ministry of Finance has issued a notification under sub-section (1F) of Section 197A of the Income-tax Act, 1961, exempting income-tax deduction on payments made to credit guarantee funds. These funds are established and wholly financed by the Central Government and are managed by the National Credit Guarantee Trustee Company Limited (NCGTCL), as specified in Section 10(46B)(ii) of the Act.
This exemption applies to ensure that no tax will be deducted at source under Chapter XVII of the Income-tax Act on payments received by such funds. The notification is effective from its date of publication in the Official Gazette, providing clarity on tax treatment for these government-supported credit guarantee initiatives.
MINISTRY OF FINANCE
(Department of Revenue)
Notification 2/2025 Income Tax | Dated: 2nd January, 2025
S.O. 20(E).—In exercise of the powers conferred by sub-section (1F) of section 197A of the Income-tax Act,1961 (43 of 1961) (hereinafter referred to as the said Act), the Central Government hereby notifies that no deduction of income-tax under Chapter XVII of the said Act shall be made on the payments received by a credit guarantee fund established and wholly financed by the Central Government and managed by the National Credit Guarantee Trustee Company Limited as referred to in sub-clause (ii) of clause (46B) of section 10 of the said Act.
2. This notification shall come into force from the date of its publication in the Official Gazette.
[F. No. 2/2025/F.No. 275/110/2024-IT(B)]
RUBAL SINGH, Dy. Secy. (IT-Budget)
