What is Tonnage income? What is Computation of tonnage income? Section 115VF and 115VG of 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 tonnage income"
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 Table:

 

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 1,000 tons

exceeding 10,000 but not more than 25,000

Rs. 5,470 plus Rs. 42 for each 100 tons exceeding 10,000 tons

exceeding 25,000

Rs. 11,770 plus Rs. 29 for each 100 tons exceeding 25,000 tons.

(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.

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