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The Central Government specifies that no deduction of tax shall be made under section 194-I of the Income-tax Act on lease rent or supplemental lease rent payments made by a lessee to a lessor that is a Unit of an International Financial Services Centre for the lease of a ship. The lessor must furnish a statement-cum-declaration in Form No. 1 to the lessee. The lessor must provide details of previous years for ten consecutive assessment years for which the lessor claims a deduction under section 80LA. The lessee stops tax deduction after receipt of Form No. 1 and includes payment particulars in the statement of deduction of tax under section 200. This relaxation applies only during the declared ten consecutive assessment years.
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MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) NOTIFICATION
New Delhi the 1st August, 2023
INCOME TAX
S.O. 3451(E).— In exercise of the powers conferred by sub-section (1F) of section 197A read with clause (c) of sub-section (2) of section 80LA, of the Income-tax Act, 1961 (43 of 1961) (hereinafter the Income-tax Act), the Central Government hereby specifies that no deduction of tax shall be made under section 194-I of the Income-tax Act on payment in the nature of lease rent or supplemental lease rent, as the case may be, made by a person (hereinafter referred as ‘lessee’) to a person being a Unit of an International Financial Services Centre (hereinafter referred as ‘lessor’) for lease of a ship subject to the following-
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.
The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall lay down procedures, formats and standards for ensuring secure capture and transmission of data and uploading of documents and the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies.
Explanation: for the purpose of this notification-
Form No. 1 To be furnished by a Unit engaged in the business of leasing of a ship of an International Financial Services Centre to the Lessee
Statement-cum-Declaration
I................................... son/daughter of.....................................in capacity...................................... , do hereby declare that the above-mentioned unit is engaged in the business of leasing of a ship and is eligible for deduction under sub-sections (1A) and sub section (2) of section 80LA of the Income-tax Act, 1961. I further declare that we have opted to claim the said deduction for the period from the previous year...............relevant to assessment year...............to the previous year...............relevant to assessment year...............I further declare that the above mentioned Unit continues to be a unit working in International Financial Services Centre and continues to be engaged in the business of ship leasing during the year...............(relevant to Assessment Year...............) in which this statement-cum- declaration is being submitted.
Verification
I………………………..son/daughter of………………………..in capacity………….…………do hereby certify that all the particulars furnished above are correct and complete.
Signature of the declarant (to be signed by a person competent to sign the return of income as provided in section 140 of the Income-tax Act)
[Notification No. 57 /2023/F. No. 275/19/2023-IT(B)] SHYAM SHARMA, Under Secy.
