CBDT issued Notification No. 141/2026 on November 4, 2026, via S.O. 6016(E), under the Income Tax Act 2025, exempting dividend payments made between aircraft leasing units operating within International Financial Services Centres from Tax Deducted at Source. The exemption targets intra-IFSC dividend flows, reducing tax friction for aircraft leasing structures housed in GIFT City, India's designated IFSC, and aligns with India's broader push to develop a globally competitive aircraft leasing hub domestically.

India imports almost all its aircraft leasing services, with GIFT City IFSC established partly to capture this business onshore. Aircraft leasing is capital-intensive and structurally complex: a parent leasing entity often holds aircraft through subsidiary special purpose vehicles, all co-located within the IFSC. When one IFSC unit pays a dividend to another IFSC unit within the same structure, applying TDS creates a cash-flow drag and administrative burden without any real fiscal gain — the funds stay within the same regulatory perimeter.

By notifying an exemption under the Income Tax Act 2025, CBDT removes this friction. The move mirrors global IFSC best practices, where jurisdictions like Ireland and Singapore offer pass-through tax treatment for intra-group flows within ring-fenced financial zones.

For India's financial system, this matters because aircraft leasing represents over $150 billion in global annual transactions. If GIFT City can attract even a fraction of this business, it reduces India's current account outflows on lease rentals, strengthens the IFSC's competitive positioning, and builds specialised financial expertise domestically. For RBI Grade B aspirants, this sits at the intersection of IFSC regulation, capital account management, and India's financial sector development strategy — all core ESI themes. The notification also signals how tax policy is being used as an active instrument to shape the structure of India's emerging financial centres.