Plane lease costs rise as airlines line up for withholding tax sop

New Delhi: Airlines are scrambling to sign up lease deals for aircraft to get the withholding tax exemption on lease rental income. The last date for seeking such exemptions is March 31, 2007.
Indian carriers are likely to take delivery of around 45 new aircraft in the current calendar year. In the last Budget, the finance minister had extended the exemption granted on withholding tax on lease rental incomes, under Section 10 (15A) of Income Tax Act, by another year. Despite hectic lobbying by airline companies and the Federation of Indian Airlines, the industry association, many in the industry feel that another extension may not be forthcoming this Budget.
Air Deccan plans to take delivery of 12 aircraft over the next one year. Over two-third of the 240-odd aircraft flying in the country are on short or long term lease, ranging between three to five years.
Indian carriers have cumulatively placed orders for 400-odd aircraft which are expected to join their respective fleet by 2012.
05/02/07 Sudipto Dey/Economic Times

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Categories: General Aviation feb 2007