India: Exemption from withholding tax on specific payments to Financial Centre units
The notification is effective from July 1, 2025.
The Central Board of Direct Taxes (CBDT) on June 20, 2025, issued Notification No. 67/2025, exempting the withholding tax requirement on specific payments to International Financial Services Centre (IFSC) units eligible for a “tax holiday” under section 80LA of the Income-tax Act, 1961 (the Act).
Exempt payments include:
- Professional / consulting / advisory fees
- Interest on leases
- Freight / hire charges
- Management fees
The exemption applies for 10 consecutive tax years as declared by the payee with a requirement for such payee to furnish statement-cum-declaration (Form No. 1) to the payer for each year.
The notification is effective from July 1, 2025.
For more information, contact a KPMG tax professional in India:
Gaurav Goyal | gauravgoyal5@kpmg.com