What is Tonnage income? What is Computation of tonnage
income? Section 115VF and
Income Tax Act 1961
Tonnage income and Computation of tonnage income are
defined under sections 115VF and 115VG of Income Tax Act 1961.
Provisions under these Sections are :
Section 115VF of Income Tax Act "Tonnage income"
Section 115VF. Subject to the other provisions of this
Chapter, the tonnage income shall be computed in accordance
with section 115VG and the income so computed shall be
deemed to be the profits chargeable under the head "Profits
and gains of business or profession" and the relevant
shipping income referred to in sub-section (1) of section
115V-I shall not be chargeable to tax.
Section 115VG of Income Tax Act "Computation of
115VG. (1) The tonnage income of a tonnage tax company for a
previous year shall be the aggregate of the tonnage income
of each qualifying ship computed in accordance with the
provisions of sub-sections (2) and (3).
(2) For the purposes of sub-section (1), the tonnage income
of each qualifying ship shall be the daily tonnage income of
each such ship multiplied by-
(a) the number of days in the previous year; or
(b) the number of days in part of the previous year in case
the ship is operated by the company as a qualifying ship for
only part of the previous year, as the case may be.
(3) For the purposes of sub-section (2), the daily
tonnage income of a qualifying ship having tonnage referred
to in column (1) of the Table below shall be the amount
specified in the corresponding entry in column (2) of the
Qualifying ship having net tonnage
Amount of daily tonnage income
up to 1,000
Rs. 70 for each 100 tons
exceeding 1,000 but not more than 10,000
Rs. 700 plus Rs. 53 for each 100 tons exceeding
exceeding 10,000 but not more than 25,000
Rs. 5,470 plus Rs. 42 for each 100 tons exceeding
Rs. 11,770 plus Rs. 29 for each 100 tons exceeding
(4) For the purposes of this Chapter, the tonnage
shall mean the tonnage of a ship indicated in the
certificate referred to in section 115VX and includes the
deemed tonnage computed in the prescribed manner.
Explanation.-For the purposes of this sub-section,
"deemed tonnage" shall be the tonnage in respect of an
arrangement of purchase of slots, slot charter and an
arrangement of sharing of break-bulk vessel.
(5) The tonnage shall be rounded off to the nearest
multiple of hundred tons and for this purpose any tonnage
consisting of kilograms shall be ignored and thereafter if
such tonnage is not a multiple of hundred, then, if the last
figure in that amount is fifty tons or more, the tonnage
shall be increased to the next higher tonnage which is a
multiple of hundred and if the last figure is less than
fifty tons, the tonnage shall be reduced to the next lower
tonnage which is a multiple of hundred; and the tonnage so
rounded off shall be the tonnage of the ship for the
purposes of this section.
(6) Notwithstanding anything contained in any other
provision of this Act, no deduction or set off shall be
allowed in computing the tonnage income under this Chapter.