CBDT Exempts Dividend Payments Between IFSC Aircraft Leasing Units From TDS Under Section 393(1):

The Central Board of Direct Taxes (CBDT) has officially specified that no TDS (Tax Deducted at Source) will be deducted under Section 393(1) of the Income Tax Act from any income in the nature of a dividend paid by any unit of an International Financial Services Centre (IFSC) that is mainly engaged in the business of leasing an aircraft (payer) to a unit of an IFSC that is mainly involved in the business of leasing an aircraft (payee). However, this will only be permissible subject to the following conditions:

Conditions for Payee

• The first condition is that the payee must submit a statement-cum-declaration in Form No.1(N) (attached with the notification) to the payer, providing the relevant details of the concerned tax year in which the dividend income eligible for exemption under Schedule VI of the said Act is payable.

  

• The second condition is that the aforementioned declaration should be submitted and verified according to the manner specified in the form itself for the tax year in which the dividend income eligible for exemption under Schedule VI of the said Act is payable.

Conditions for Payer

• Tax will be deducted on payments made before the date of receipt of the form, but no tax should be deducted on payments made after the date of receipt of the form.

For complete information, refer to the official notification.