CBDT exempts International Financial Services Centre from TCS u/s 206C (1H)

CBDT exempts International Financial Services Centre (IFSC) from TCS under sub-section (1H) of u/s 206C

Sub section (1H) of Section 206C of the Income Tax Act, 1961 (the Act) provides that every seller, who receives any amount as consideration for sale of any goods of the value or aggregate of such value exceeding fifty lakh rupees in any previous year, other than the goods being exported out of India or goods covered in section 206C(1) or motor vehicle etc. or authorised dealer or seller of an overseas tour program package shall, at the time of receipt of such amount, collect from the buyer, a sum equal to 0.1 per cent of the sale consideration exceeding fifty lakh rupees as income-tax

CBDT has notified that a Unit of International Financial Services Centre (IFSC) shall not be considered as buyer for the purposes of the said sub-section in respect of purchase of goods from a seller.

The exemption is subject to the following conditions, namely:

(a) the buyer shall –

(i) furnish a statement-cum-declaration in Form No. 1A annexed to this notification (hereinafter referred to as the said Form) to the seller giving details of previous years relevant to the ten consecutive assessment years for which the buyer opts for claiming deduction under sub-sections (1A) and (2) of section 80LA; and

(ii) such statement-cum-declaration so furnished shall be verified in the manner specified in the said Form, for each previous year relevant to the ten consecutive assessment years for which the buyer opts for claiming deduction under sub-sections (1A) and (2) of section 80LA.

(b) the seller shall –

(i) not collect tax on payment received from the buyer after the date of receipt of copy of statement-cum-declaration in the said Form from the buyer; and

(ii) furnish the particulars of all the payments received from the buyer on which tax has not been collected in pursuance of this notification in the statement of collection of tax referred to in sub-section (3) of section 206C of the said Act read with rule 31AA of the Income-tax Rules, 1962.

The relaxation under this notification shall be available to the buyer only during the said previous years relevant to the ten consecutive assessment years as declared by the buyer in the said Form for which deduction under section 80LA of the said Act is being opted and the seller shall be liable to collect tax on payments received for any other year.

Form No. 1A has been prescribed to be furnished by a Unit of International Financial Services Centre (‘buyer’) to a Unit of International Financial Services Centre (‘seller’).

Download CBDT Notification No. 6/2025 Click Here >>

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