Union Budget 2025-26 (Full) + Finance Bill, 2025

IV. Exemption to capital gains and dividend for ship leasing units in IFSC

Clause (4H) of section 10 provides exemption to non-residents or unit of IFSC engaged in aircraft leasing on capital gains tax on transfer of equity shares of domestic companies being units of IFSC, engaged in aircraft leasing. Further, clause (34B) of section 10 provides exemption to dividend paid by a company being a unit of IFSC engaged in aircraft leasing, to a unit of IFSC engaged in aircraft leasing.

2. It has been represented that similar to aircraft leasing business, in the ship leasing business, separate special purpose vehicles (SPVs) are created for one or more vessels to safeguard the investors. Therefore, on the lines of aircraft leasing, it is proposed to extend the exemption in,–

(I) Clause (4H) of section 10 to non-residents or units of IFSC engaged in ship leasing on capital gains tax on transfer of equity shares of domestic companies being units of IFSC, engaged in ship leasing.

(II) Clause (34B) of section 10 to dividend paid by a company being a unit of IFSC engaged in ship leasing, to a unit of IFSC engaged in ship leasing.

3. These amendments will take effect from the 1st day of April, 2025.

[Clause 6]

 

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Full Text:

Union Budget 2025-26 (Full) + Finance Bill, 2025

Exemption to capital gains and dividend expanded to ship leasing units in IFSC, aligning tax treatment with aircraft leasing. The measure extends existing IFSC exemptions applying to aircraft leasing so that non residents or IFSC units engaged in ship leasing are exempt from capital gains tax on transfers of equity shares of domestic companies that are IFSC ship leasing units, and dividends paid by an IFSC ship leasing company to another IFSC ship leasing unit are likewise exempt. The amendment aligns ship leasing with aircraft leasing treatment and specifies an effective commencement under the Finance Bill.