Relaxation w.r.t. deduction of tax on the payment of aircraft leasing

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Notification And Circular, Notification and Circular

The CBDT vide Notification No. 65/2022 dated June 16, 2022 has issued relaxation from Tax Deducted at Source (“TDS”) under Section 194I of the Income Tax Act, 1961 (“the IT Act”) w.e.f. July 01, 2022, on payment in respect of lease rentals by a person engaged in the business of leasing of aircraft (“Lessee”) to an aircraft unit located in the International Financial Services Center (“IFSC”) (“the Lessor”) claiming exemption under Section 80LA of the IT Act, subject to the certain specified conditions, in a following manner:

  • The Lessor shall-
    • Furnish a statement-cum-declaration in Form No. 1 in the manner specified, to the Lessee giving details of previous years relevant to the ten consecutive assessment years for which the Lessor opts for claiming deduction under Section 80LA(1A) read with Section 80LA(2) of the IT Act.
  • The Lessee shall, —
    • Not deduct tax on payment made or credited to Lessor after the date of receipt of Form No. 1.
    • Furnish the particulars of all the payments made to Lessor on which tax has not been deducted, in the statement of TDS under Section 200(3) of the IT Act read with Rule 31A of the Income-Tax Rules, 1962 (“the IT Rules”).
  • The relaxation shall be available during the previous years relevant to the ten consecutive assessment years as declared in Form No. 1. Further, the Lessee shall be liable to deduct tax on payment of lease rent for any other year.
  • Procedures, formats and standards to be laid down by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), for ensuring secure capture and transmission of data and uploading of documents and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies

The Notification can be accessed at: https://egazette.nic.in/WriteReadData/2022/236645.pdf

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