TDS Exemption u/s 194I on lease rent payments to units of ship leasing companies in IFSC

Exemption from TDS u/s 194I for payments of lease rents to units of ship leasing companies in IFSC

CBDT has issued Notification No. 57 of 2023 dated 1st August 2023 providing exemption from TDS u/s 194I for payments of lease rents to units of ship leasing companies in International Financial Services Centre (IFSC).

Eligibility conditions:

(1) The lessor shall,-

(i) furnish a statement-cum-declaration in Form No.1 to the lessee giving details of previous years relevant to the ten consecutive assessment years for which the lessor opts for claiming deduction under sub-sections (1A) and (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-sections (1A) and (2) of 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 statement- cum- declaration in Form No. 1 from the lessor; and

(ii) also 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.

The above relaxation shall be available to the lessor only during the said previous years relevant to the ten consecutive assessment years as declared by the lessor in Form No. 1 for which deduction under section 80LA is being opted. The lessee shall be liable to deduct tax on payment of lease rent for any other year.

Form No. 1 has been prescribed which is to be furnished by a Unit engaged in the business of leasing of a ship of an International Financial Services Centre to the Lessee.

Download CBDT Notification No. 57 /2023 Click Here >>

• Penalty u/s 271B for unfilled column 40 in Tax Audit Report Form 3CD deleted by ITAT
• Merely ex-parte rectifying computation without amending assessment order not make it nullity- ITAT
• Once assessee discharges primary onus, it shifts to AO to bring evidence to contrary – ITAT
• Cost Inflation Index for FY/Tax Year 2026-27 notified by CBDT. See Up-to-date Table of CII
• Power of CIT(A) u/s 251(1)(a) to remand case can be exercised only in best judgment assessment