NE NEWS SERVICE
NEW DELHI, AHMEDABAD, FEB 1
Aircraft leasing companies based out of GIFT city in Gujarat”s Gandhinagar would get a tax holiday on capital gains and rental income earned, Finance Minister Nirmala Sitharaman announced on Monday.
At present, there are no aircraft leasing companies in Gujarat International Finance Tec (GIFT) city.
“I propose to include, among others, tax holiday for capital gains for aircraft leasing companies, tax exemption for aircraft lease rentals paid to foreign lessors… located in IFSC (International Financial Services Centre),” the minister said in her budget speech.
No major aircraft leasing companies are based in India. Majority of the aircraft fleet with the Indian carriers have been leased from foreign companies such as Avolon, GECAS, BBAM, BOC Aviation and Dubai Aerospace Enterprise Capital.
The government’s budget announcement about tax holiday is to attract these leasing companies to establish an office in GIFT city so that the Indian airlines can do the rental payment in rupees instead of USD.
Remi Maillard, the president and managing director of Airbus India and South Asia, called the finance minister’s announcement a “significant” one as it would provide some relief to the Indian carriers who are bleeding cash due to the COVID-19 pandemic.
Airbus is one of the two largest aircraft manufacturers in the world. Another one is Boeing.
“The proposal sits well with India”s desire to develop a local aircraft leasing and financing industry to accelerate the maturity and ”Atmanirbharta” of the Indian aviation industry,” said Maillard, who is also the chairman of Civil Aviation Committee of industry body FICCI.
Tax support for aircraft leasing and rentals will help grow the fleet size in India as a vast majority of these aircraft will likely be leased, he added.
Tax incentives will attract global players: GIFT City
Gujarat International Finance Tec-City (GIFT City) on Monday welcomed the Union Budget, saying tax incentives announced for International Financial Services Centre (IFSC) will help to attract global players.
“The slew of tax incentives announced for GIFT IFSC in the Union Budget “has once again reaffirmed the government of India’s commitment to developing GIFT IFSC as a global financial hub,” Tapan Ray, Managing Director and Group CEO of GIFT City said in a release.
“The tax announcement would help in attracting global players in the Fund business, aircraft leasing and financing business and offshore investment banking sector to set up their base in GIFT IFSC. We thank the Government of India for continuously bringing in measures to facilitate businesses at GIFT IFSC,” the release added.
“The development of a world-class Fintech hub at GIFT City announced in the Budget “will go a long way in promoting and developing Fintech start-ups. GIFT City would provide a platform to Fintech firms to expand globally,” Ray said.
The Fintech hub will facilitate research, innovation and development of new-age skills in fintech, which will help in creating new job opportunities and attract quality talent to GIFT City, the release added.
