Income tax exemption for dividend paid by units of IFSC

The Central Government on 20th July, 2023 has specified that no deduction of income tax shall be made from any income in the nature of dividend paid by any unit of an International Financial Services Centre, primarily engaged in the business of leasing of an aircraft to a company subject to the following-

1. The payee shall furnish a statement-cum-declaration in Form No. 1
2. Such statement-cum-declaration shall be furnished and verified in the manner prescribed in Form No. 1
3. The payer shall not deduct tax on payment made or credited to the recipient of such dividend (payee) after the date of receipt of copy of statement-cum-declaration in Form No. 1 from payee; and (ii) furnish the particulars of all the payments made to the recipient of such dividend on which tax has not been deducted.

The Notification has provided Form 1 for furnishing statement-cum-declaration. This notification shall come into force from 1st September, 2023.