{"id":401055,"date":"2026-11-11T18:00:22","date_gmt":"2026-11-11T12:30:22","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=401055"},"modified":"2026-11-11T18:10:49","modified_gmt":"2026-11-11T12:40:49","slug":"aircraft-leasing-ifsc-dividend-tds-exemption-notification-2026","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2026\/11\/11\/aircraft-leasing-ifsc-dividend-tds-exemption-notification-2026\/","title":{"rendered":"CBDT exempts dividends paid between IFSC aircraft-leasing units from TDS under Income-tax Act, 2025"},"content":{"rendered":"
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On 4 November 2026, the Ministry of Finance issued a notification under Section 400(1)<\/a> read with Schedule VI<\/a> (Table, Sl. No. 11) of the Income-tax Act, 2025<\/a>, prescribing a mechanism for non-deduction of tax at source on specified dividend payments between eligible IFSC aircraft leasing units.<\/p>\n

The notification provides that no tax shall be deducted under Section 393(1) of the Act from dividend income paid by an IFSC unit engaged in aircraft leasing to another IFSC aircraft-leasing unit claiming exemption under Schedule VI.<\/p>\n

The notification takes effect from 1-4-2026.<\/p>\n

Schedule VI<\/a> (Table, Sl. No. 11) of the Income-tax Act, 2025<\/a> grants exemption in respect of specified dividend income earned by eligible aircraft-leasing units operating from IFSCs. However, in the absence of a procedural notification, tax could still have been deducted at source despite the income being exempt in the hands of the recipient. This notification provides the operational framework enabling eligible recipients to receive dividend income without TDS upon furnishing the prescribed declaration.<\/p>\n

Key provisions:<\/p>\n

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  1. \n

    The notification grants a TDS exemption on specified dividend payments between eligible IFSC units engaged primarily in the business of aircraft leasing. The exemption applies where:<\/p>\n