Gazette Notification No. 353/F.No. 11/15/66 FTD dt. 28.5.1973
GSR No. 284 (E)
Agreed translation of the Note No. 127/18, dated the 29th March 1973 received from the Imperial Government of Iran by the Government
of India :
“The Imperial Ministry of Foreign Affairs presents its compliments to the Embassy of India and with reference to the discussions
and corresponding notes, exchanged regarding the reciprocal exemption of Indian and Iranian airlines from payment of income-tax has
the honour to state :
According to the Direct Tax Law of 19 March 1967, foreign air companies may be exempted from payment of income tax on a reciprocal
basis; and in fact considering that no income tax has been collected from Iranian air companies in India, the Iranian Government
has to this date refrained from collecting income tax from Indian air companies.
Thus, as the provisions of reciprocity prescribed in the Direct Tax Law, has been in fact established, as long as the said provision
observed by the Indian Government, Indian air companies will be, as before, exempted from the payment of tax derived from the transportation
of goods and passengers.
It is, therefore, proposed that should the above be agreed to, this Note and the Embassy’s reply regarding the application and observance
of reciprocity by the Government of India may be considered as a temporary agreement between the two Parties in respect of exemption
from payment of income tax by the air companies of both Parties.”
Note No. TEH/COM/203/6/70 dated the 1st April, 1973 issued by the Government of India to the Imperial Government of Iran in reply
“The Embassy of India presents its compliments to the Imperial Ministry of Foreign Affairs and in regard to the question of reciprocal
exemption of Indian and Iranian airlines from payment of income-tax, has the honour to refer to their Note No. 127/18, dated March
29, 1973, which reads as follows :
With reference to this proposal, the Embassy of India has the honour to inform the Imperial Ministry of Foreign Affairs that the
Government of India accepts the terms of the foregoing text and considers that that Note and this Note will constitute an Agreement
between the two Governments for the avoidance of double taxation of income of enterprises operating aircraft, which shall enter into
force on this date, pending the conclusion of a general agreement for the avoidance of double taxation of income from various sources
including civil aviation.
In accordance with the purpose of the Notes now exchanged, the Embassy of India has the honour to stress the fact that acceptance
by the Government of India is based on the understanding that the exemption in respect of income derived from operation of aircraft
in international traffic by Indian airline companies and Iranian airline companies, shall be on the basis of reciprocity and shall
apply from the beginning of operation of these airlines in Iran and India respectively and that in case any tax on the aforesaid
income has been recovered by either Government as of the date of this Agreement, the same shall be refunded by that Government.
The Embassy of India avails itself of this opportunity to renew to the Imperial Ministry of Foreign Affairs the assurances of its