Reciprocal tax exemption for airline operating income: exempts cross border airline income, excludes internal traffic, and allows refunds.

A bilateral understanding grants reciprocal exemption from income tax for income derived from the operation of aircraft by designated airlines of India and Afghanistan, including participation in pools but excluding internal traffic. Definitions clarify covered taxes, designate eligible airlines, and define "operation of aircraft" to include transport and related activities. The exemption applies from the date of the underlying air services agreement; taxes already collected may be refunded on application. The agreement continues indefinitely subject to a termination notice procedure that yields fiscal effect in the second calendar year after notice.

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