No TDS Payable On Dividend Paid By Aircraft Leasing IFSC Unit: CBDT

The Central Board of Direct Taxes (CBDT) has notified that no TDS is deductible On dividends paid by the Aircraft Leasing International Financial Services Centre (IFSC) Unit.

The Central Government specified that no deduction of income tax shall be made under Section 194 of the Income-tax Act from any income in the nature of a dividend paid by any unit of an International Financial Services Center.

IFSC is primarily engaged in the business of leasing an aircraft (payer) to a company, being a Unit of an International Financial Services Center primarily engaged in the business of leasing an aircraft (payee).

The income tax deduction shall be allowable subject to the fulfillment of various conditions.

The payee shall furnish a statement-cum-declaration in Form No. 1 to the payer giving details of the previous year relevant to the assessment year in which the dividend income eligible for exemption under clause (34B) of Section 10 of the Income-tax Act is payable.

The statement-cum-declaration shall be furnished and verified in the manner prescribed in Form No. 1 for the previous year relevant to the assessment year in which the dividend income eligible for exemption under Section 10(34B) of the Income Tax Act is payable.

The payer shall not deduct tax on payment made or credited to the recipient of such dividend (payee) after the date of receipt of a copy of the statement-cum-declaration in Form No. 1 from the payee.

The payer shall furnish the particulars of all the payments made to the recipient of dividends on which tax has not been deducted in view of this Notification in the statement of deduction of tax referred to in Section 200(3) of the Income-tax Act, read with Rule 31A of the Income-tax Rules, 1962.

Notification No. 52/2023

Date: 20/07/2023

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