Finance Ministry Announces No Deduction of Income Tax on Payments Received by Credit Guarantee Fund Trust for MSMEs [Read Notification]

The Ministry of Finance issued Notification No. 5476(E) dated December 18, 2024, announcing that no income tax will be deducted at source (TDS) on payments made to the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

This exemption is provided under the Income Tax Act, 1961, and specifically applies to payments mentioned in Clause (46B) of Section 10 of the Income Tax Act.

The notification issued under Section 197A(1F) of the Act ensures that the Credit Guarantee Fund Trust for Micro and Small Enterprises ( CGTMSE ) will receive payments without any tax deduction under Chapter XVII, which governs TDS provisions.

This new rule takes effect immediately, starting from the date of publication in the Official Gazette, i.e., December 18, 2024.

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Extract from the Notification

“In exercise of the powers conferred by sub-section (1F) of section 197A of the Income-tax Act, 1961 (43 of 1961) (hereafter in this notification referred to as the said Act), the Central Government hereby notifies that no deduction of income-tax shall be made under Chapter XVII of the said Act on any payment received by the Credit Guarantee Fund Trust for Micro and Small Enterprises as referred to in clause (46B) of section 10 of the said Act.

2. This notification shall come into force on the date of its publication in the Official Gazette.”

[No. 128/2024/F.No. 275/77/2024-IT(B)]

RUBAL SINGH, Dy. Secy.

To Read the full text of the Notification CLICK HERE

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