CBDT releases new forms for ship, aircraft leasing businesses; dividend exemption: Check key details here

The Central Board of Direct Taxes (CBDT) issued a series of forms tailored for businesses operating in the aviation and shipping sectors. These forms aim to simplify tax procedures and offer clarity on compliance obligations.

These forms are accessible on the Income Tax Department portal.In separate notifications the I-T Department released Form-1 for ship leasing business, Form-1 for aircraft leasing business and other forms like Form 10-IEA, Form 10-IFA and Form 3 AF.

Here are key details about the newly released forms:

1) Form-1 for aircraft leasing business As per the Notification 65/2022, CBDT under the Income-tax Act, has decided that no tax deduction will be made under section 194-I of the Income Tax Act, 1961, on lease rent or supplemental lease rent paid by a lessee to a lessor who is a unit located in an International Financial Services Centre, for leasing an aircraft, subject to certain conditions.

2) Form-1 for dividend exemption under Section 10 (34B)

The Central Government, under the Income-tax Act, 1961, has specified that no income tax deduction will be made under section 194 of the Income-Tax Act from any dividend paid by a unit of an International Financial Services Centre, primarily engaged in aircraft leasing business (payer), to a company also engaged in aircraft leasing business in an International Financial Services Centre (payee). This is also subjected to certain conditions.

3) Form-1 for ship leasing business

As per notification 57/2023, of the I-T Department, no tax deduction will be made under section 194-I of the Income-Tax Act on lease rent or supplemental lease rent paid by a lessee to a unit of an International Financial Services Centre (the lessor) for leasing a ship, subject to certain conditions.

4) Form-10 IEA

Form 10-IEA has been notified under Notification 43/2023 of the I-T Department. This form allows taxpayers the option to choose between the old and new tax regimes. Using this form, taxpayers, specifically those with business income, can exercise their right to either opt out or re-enter the new tax regime. Each taxpayer can file this form twice in their lifetime — once to opt out of the new tax regime and once to re-enter.

5) Form-10 IFA

Form-10 IFA is used to exercise the option provided under subsection (5) of Section 115BAE of Income Tax Act, 1961. It is specifically for resident co-operative societies involved in manufacturing or production activities. Under this, if a co-operative society opts in, its income will be taxed at a concessional rate, subject to certain conditions.

6) Form-3AF

Form 3AF, introduced by the Central Board of Direct Taxes (CBDT) through Notification 54/2023, is used under new rule 6A B of the Income Tax Act, 1961. This form is to be submitted by taxpayers for claims regarding the amortisation of specific preliminary expenses under section 35D(2)(a) of the Income-tax Act.