Tax Relief for Non-Resident Shipping Companies: Income-Tax Act Compliance with DTA Agreements for Germany, Finland, France, Greece, Japan.

The circular addresses the computation of profits for non-resident shipping companies under the Income-tax Act, 1961, following amendments by the Finance Act, 1975. It highlights that Income-tax Officers have not been granting relief under Double Taxation Avoidance (DTA) Agreements with countries like Germany, Finland, France, Greece, and Japan. These agreements stipulate a tax reduction of 50% (55% for Japan) on profits from international shipping, excluding occasional shipping or tramp steamers. The circular clarifies that regular shipping lines from these countries should receive tax reductions during ad-hoc assessments, and instructs officers to apply these provisions accordingly.