Notification under subsection (1F) of section 197A of Income tax Act, 1961

## Report on Income Tax Notification S.O. 3679(E) **1. Executive Summary:** This report analyzes Income Tax Notification S.O. 3679(E), issued by the Ministry of Finance's Department of Revenue, Central Board of Direct Taxes (CBDT) on September 10, 2021. This notification specifies that no tax deduction under Section 194IA of the Income-tax Act, 1961, shall be made on payments to Air India Limited (PAN: AACCN6194P) for the transfer of immovable property to Air India Assets Holding Limited (PAN: AAQCA4703M) under a plan approved by the Central Government. The notification is deemed to have come into effect retroactively from April 1, 2021. The core purpose is to facilitate the transfer of immovable property in this specific restructuring, avoiding potential tax burdens on Air India Limited during this process. **2. Introduction:** The purpose of this report is to provide an informative overview and analysis of Income Tax Notification S.O. 3679(E), based solely on the information contained within the provided policy text. This analysis focuses on the core provisions, potential implications, and target audience of the notification. **3. Policy Overview:** This is a *new* policy in the form of a notification. * **Core Objective(s):** Based on the text, the primary objective is to exempt Air India Limited from tax deduction under Section 194IA of the Income-tax Act, 1961, on payments received from Air India Assets Holding Limited for the transfer of immovable property under a Central Government-approved plan. This facilitates the transfer of assets. **4. Background and Rationale:** As a new policy, it appears to address the potential tax implications arising from the restructuring and transfer of assets related to Air India Limited. Section 194IA of the Income-tax Act deals with Tax Deduction at Source (TDS) on transfer of immovable property. Without this notification, Air India Limited would be subject to TDS on payments received from Air India Assets Holding Limited. The notification suggests a Central Government-approved plan necessitating the asset transfer and aims to streamline this process by eliminating the TDS burden. **5. Key Provisions / Changes:** As a New Policy: * The central provision is the exemption from tax deduction under Section 194IA of the Income-tax Act, 1961, for Air India Limited (PAN: AACCN6194P) on payments received from Air India Assets Holding Limited (PAN: AAQCA4703M) for transfer of immovable property. * This exemption is specifically tied to transfers made under a plan approved by the Central Government. * The notification has retrospective effect, starting from April 1, 2021. **6. Target Audience and Stakeholders:** The primary target audience is: * Air India Limited (PAN: AACCN6194P) * Air India Assets Holding Limited (PAN: AAQCA4703M) * The Central Board of Direct Taxes (CBDT) * The Ministry of Finance. It also indirectly affects anyone involved in similar asset transfers involving these entities. **7. Implementation Aspects (Inferred):** * **Responsible agency/bodies:** The Central Board of Direct Taxes (CBDT) is responsible for implementing this notification. * **Timelines or procedures:** The notification is effective from April 1, 2021. There are no explicit procedures outlined in the text, but it implies that the transfer of immovable property must be conducted under a plan approved by the Central Government to qualify for the exemption. **8. Expected Outcomes / Impact of Changes:** The likely intended outcomes include: * Facilitating the smooth transfer of immovable property from Air India Limited to Air India Assets Holding Limited as per the Central Government-approved plan. * Reducing the financial burden on Air India Limited by eliminating the immediate TDS liability. * Streamlining the restructuring process by avoiding complexities related to TDS compliance. * Providing clarity and certainty regarding the tax treatment of this specific asset transfer. **9. Conclusion:** Income Tax Notification S.O. 3679(E) is a targeted measure designed to facilitate the transfer of immovable property from Air India Limited to Air India Assets Holding Limited, exempting the former from tax deduction under Section 194IA of the Income-tax Act. Its significance lies in streamlining the asset transfer process within a Central Government-approved plan and potentially alleviating financial burdens during Air India Limited's restructuring. The retrospective application from April 1, 2021, suggests the government's intent to ensure a seamless transition and tax clarity for all transactions falling within the specified scope.

Key Entities Referenced