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of <h1>Clarification on Taxation for Non-Resident Shipping Companies: Section 172 Income Deemed at 7.5%, No Deductions Allowed.</h1> The circular addresses the taxation of income under Section 172 of the Income Tax Act, 1961, concerning non-resident shipping companies. It clarifies that income deemed under this section is taxed at a rate of 7.5%, with no deductions for expenditures, as these are presumed included in the estimated income. It discusses the lack of separate payments or agreements between exporters and operators of mother and daughter vessels, indicating that the mother ship operator is taxed on the entire freight. The document suggests that if apportionment of freight earnings is considered, a clarificatory circular should be issued to avoid audit objections.
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