The Ministry of Finance issued Notification No. S.O. 20(E), dated January 2, 2025, announcing tax relief by exempting income tax deduction at source (TDS) on specific payments under Chapter XVII of the Income Tax Act, 1961.
The exemption applies to payments received by credit guarantee funds that are fully financed by the Central Government and managed by the National Credit Guarantee Trustee Company Limited.
This notification issued by the Ministry of Finance (Department of Revenue) states that certain payments specifically those mentioned under sub-clause (ii) of clause (46B) of section 10 of the Income Tax Act, will no longer have tax deducted at source (TDS) applied to them.
It becomes effective immediately from the date of publication in the Official Gazette.
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The National Credit Guarantee Trustee Company Ltd (NCGTC) is a private limited company formed on March 28, 2014, under the Companies Act of 1956. It was established by the Department of Financial Services, which operates under the Ministry of Finance and is owned by the Government of India. NCGTC’s primary purpose is to serve as a central trustee organization that manages multiple credit guarantee funds for various financial programs.
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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.
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