A change to section 80 LA of the Income Tax Act, 1961 would have been reported by the Central Board of Direct Taxes (CBDT).
The central government through the use of the powers granted 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), mentioned that no deduction of the tax will be incurred under section 194-I of the Income-tax Act upon the payment such as lease rent or the supplemental lease rent, under the case, incurred via a person (lessee) to the individual being a unit of International Financial Services Centre (‘lessor’) for the lease of a ship as per the following-
(a) The lessor shall,-
- (i) Before the lessee provide a statement-cum-declaration in Form No.1 providing information of the aforementioned years pertinent to the 10 consecutive assessment years for which the lessor chooses to avail the deduction under sub-section (1A) and (2) of section 80LA of the Income Tax Act.
- (ii) These statement-cum-declaration would be provided and validated accordingly to the Form No.1, for each aforementioned year relevant to the ten consecutive assessment years for which the lessor chooses to avail deduction under sub-sections (1A) and (2) of section 80LA of the Income Tax Act.
(b) The lessor shall,-
- (i) Once the lessee receives a copy of the statement-cum-declaration in Form No.1 from the lessor, they are not required to deduct tax on any payment made or credited to the lessor after that date.
- (ii) Lessee are required to provide particulars of all payments made to the lessor on which tax has not been deducted due to this notification in the statement of deduction of tax referred to in subsection (3) of section 200 of the Income-tax Act read with rule 31A of the Income-tax Rules, 1962.
As reported, the aforesaid relaxation would be available before the lessor merely at the time of the stated aforementioned years pertinent to the 10 successive assessment years as the lessor displayed in Form No.1 for which deduction under section 80LA is chosen. For the payment of lease rent for any other year, the lessee will be responsible to deduct tax.
Read Also:- All About Penalty of Section 271CA Under Income Tax Act
In the notification, it mentioned that the Principal Director General of the income tax (systems) or the Director General of income tax (systems) according to the case would lay down methods, formats, and standards in order to confirm safe data capturing and transmitting and uploading the documents as well as the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) will be liable for advancing and executing the relevant security, archival and retrieval policies.
As an Elaboration Before The Notification, It Was Stated That
(A) The term “ship” shall have the same meaning as defined in clause (ii) of the Explanation to clause (4F) of section 10 of the Income-tax Act.
(B) ‘International Financial Services Centre’ would secure the same meaning as given to it in clause (q) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005); and
(C) ‘Unit’ would secure the identical meaning as given to it in clause (zc) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005).
From the 1st day of September 2023, the notification will be effective.
