India: Exemption from withholding tax on specific payments to Financial Centre units

The notification is effective from July 1, 2025.

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August 25, 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

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