The Ministry of Finance (MoF) on July 03, 2026, notified regarding TDS exemption on aircraft lease payments to IFSC units under the Income-tax Act, 2025.
The following has been stated:
• It notifies that no tax shall be deducted at source (TDS) under Section 393(1) of the Income-tax Act, 2025, on payments of lease rent or supplemental lease rent made by a lessee to a Unit located in an International Financial Services Centre (IFSC) engaged in the business of aircraft leasing, provided the unit opts to claim the deduction available under Section 147 of the Act.
• To avail the benefit, the IFSC unit (lessor) shall furnish a Statement-cum-Declaration in Form No. 1(N) to the lessee for each tax year covered under its chosen block of 20 consecutive tax years for claiming the deduction. Upon receipt of the declaration, the lessee is not required to deduct TDS on eligible lease payments and shall report such payments in its prescribed TDS statements. The notification also authorises the Principal Director General/Director General of Income-tax (Systems) to prescribe procedures, formats, and standards for electronic submission, secure data transmission, archival, and retrieval of the prescribed information.
• The notification is deemed to have come into force on April 1, 2026.
[Notification no. - S.O. 3609(E)]
