The Ministry of Finance, through Notification No. 123/2024 dated November 28, 2024, exempts specific entities from the provisions of Section 194N of the Income Tax Act, 1961. This exemption applies to Foreign Representations approved by the Ministry of External Affairs, including diplomatic missions, United Nations agencies, international organizations, consulates, and honorary consuls’ offices. These entities are already exempt from Indian taxes under the Diplomatic Relations (Vienna Convention) Act, 1972, and the United Nations (Privileges and Immunities) Act, 1947.
The notification clarifies that the provisions of Section 194N, which mandate tax deduction at source on certain cash withdrawals, will not apply to the mentioned organizations. This decision aligns with India’s commitment to honor international agreements and conventions. The notification comes into effect on December 1, 2024, ensuring compliance with international obligations while simplifying financial processes for exempt entities.
MINISTRY OF FINANCE
(Department of Revenue)
Notification No. 123/2024-Income-Tax | Dated: 28th November, 2024
S.O. 5121(E).—In exercise of the powers conferred by the fifth proviso to section 194N of the Income-tax Act, 1961 (43 of 1961) (hereafter in this notification referred to as the said Act), the Central Government after consultation with the Reserve Bank of India, hereby specifies that the provisions of section 194N of the said Act shall not apply to Foreign Representations duly approved by the Ministry of External Affairs of the Government of India including Diplomatic Missions, agencies of the United Nations, International Organisations, Consulates and Offices of Honorary Consuls which are exempt from paying taxes in India as per the Diplomatic Relations (Vienna Convention) Act 1972 (43 of 1972) and the United Nations (Privileges and Immunities) Act 1947 (46 of 1947).
2. The notification shall be deemed to have come into force with effect from the 1st day of December, 2024.
[Notification No. 123/2024/F. No. 275/39/2021-IT(B)]
RUBAL SINGH, Dy. Secy. (IT-Budget)
