CBDT Exempts TDS on Ship Lease Payments to IFSC Units

The Central Board of Direct Taxes (CBDT), through Notification No. 75/2026 dated 3 July 2026, has notified that no tax is required to be deducted under Section 393(1) of the Income-tax Act, 2025 on lease rent or supplemental lease rent paid to eligible International Financial Services Centre (IFSC) units engaged in the business of ship leasing. 

The exemption is conditional upon the lessor furnishing a prescribed declaration in Form No. 1(N), while the lessee is required to comply with specified reporting obligations. The notification is deemed to have come into force from 1 April 2026.