CBDT notifies no deduction of TDS on account of lease of aircraft on payments to units located in IFSC

The Central Board of Direct Taxes (CBDT) has notified the Notification No. 65/2022 in which it has been specified that the payment in the nature of lease rent paid by a person (lessee) to a unit located in International Financial Service Centre (IFSC) for the rent of an aircraft. According to the Notification, the lessee shall not deduct the TDS under section 194I of the Income tax act, if the following conditions are satisfied:-

1. The Lessors shall : –
   i. Furnish Statement cum declaration in Form No. 1 to the lessee giving details of the previous years of the previous years relevant  to 10 Assessment years for which the lessor opts for claiming deduction under sub section (1A) read with section (2) of section 80LA of the Income tax act; and
   ii. such statement-cum-declaration shall be furnished and verified in the manner specified in Form No.1,
   for each previous year relevant to the ten consecutive assessment years for which the lessor opts for
   claiming deduction under sub-section (1A) read with section (2) of the section 80LA of the Income-tax Act.
2. The Lessee shall : –
   i. not deduct tax on payment made or credited to lessor after the date of receipt of copy of statementcum-declaration in Form No. 1 from the lessor; and
   ii.furnish the particulars of all the payments made to lessor on which tax has not been deducted in view
   of this notification in the statement of deduction of tax referred to in sub-section (3) of section 200 of the
   Income-tax Act read with rule 31A of the Income-tax Rules, 1962.

It is pertinent to note that the lessee shall not deduct the TDS for the relevant assessment years for which Form No. 1 has been obtained from the Lessor. The lessee can deduct the TDS for other years.

To view and download the Notification, click here