CBDT notifies Diplomatic Missions and UN Agencies for Exemption under Provisions of Section 194N

The Central Board of Direct Taxes (CBDT) has exempted specific foreign representations and international organizations from the provisions of Section 194N of the Income Tax Act of 1961 via issuing a Notification.

Entities such as diplomatic missions, United Nations agencies, consulates, and honorary consuls that receive tax exemptions under the Diplomatic Relations (Vienna Convention) Act, 1972, and the United Nations (Privileges and Immunities) Act, 1947, will be exempt from the TDS provisions under Section 194N. This section requires a tax deduction for cash withdrawals that exceed a set limit.

The notification, issued in consultation with the Reserve Bank of India, goes into effect on December 1, 2024. This approach streamlines exempt organizations’ operational requirements while removing the burden of cash withdrawal tax compliance.

The Text of the Notification read as follows:

“In exercise of the powers conferred by the fifth proviso to section 194N of the Income-tax Act, 1961 (43 of 1961) (hereafter in this notification referred to as the said Act), the Central Government after consultation with the Reserve Bank of India, hereby specifies that the provisions of section 194N of the said Act shall not apply to Foreign Representations duly approved by the Ministry of External Affairs of the Government of India including Diplomatic Missions, agencies of the United Nations, International Organisations, Consulates and Offices of Honorary Consuls which are exempt from paying taxes in India as per the Diplomatic Relations (Vienna Convention) Act 1972 (43 of 1972) and the United Nations (Privileges and Immunities) Act 1947 (46 of 1947).

The notification shall be deemed to have come into force with effect from the 1st day of December, 2024.”

For Official Notification Download PDF Given Below: