CBDT sweetens Air India privatisation offer

The government has further sweetened the proposed privatisation of Air India. The Central Board of Direct Taxes (CBDT) has exempted the airliner from deducting tax collected at source (TCS).

According to provisions introduced last year, any seller is required to collect TCS at 0.1 per cent on sale of goods to any person for aggregate value exceeding ~500,000. For the purpose of this provision, shares of a company sold off stock exchange are considered as goods and therefore are subject to TCS, explained Shailesh Kumar, partner at Nangia & Co.

The notification says that Air India Assets Holding Ltd, a special purpose vehicle for holding the airline's loans among other things, will not be considered buyer and Air India will not be considered seller.