The Government has introduced Tonnage Tax System (TTS). The Finance Act (No.2), 2004 introduced Tonnage Tax System (TTS) for taxation of income derived from shipping activities by an Indian Company.  

A new Chapter XII-G (containing sections from 115V to 115VZC) was inserted in the Income Tax Act 1961 to provide for special provisions relating to taxation of shipping companies with effect from the assessment year 2005-06. 

The Tonnage Tax System is an optional scheme for qualifying Indian shipping company. Under the scheme, an existing qualifying company was allowed to opt for the scheme during the period from 1^st October, 2004 to 31^st December 2005 (‘initial period’). A company incorporated after the initial period or a company incorporated before the initial period but which becomes a qualifying company for the first time after the initial period may opt for the scheme within three months of the date of its incorporation or the date on which it becomes a qualifying company, as the case may be. 

 The number of (assessment-year wise) of the companies which have disclosed income under Chapter XII-G (special provisions relating to income tax shipping companies) of the Income Tax Act, as per the income tax returns filed by the companies, is as under:

Assessment year	Number of companies which disclosed income under the Chapter XII-G of the Income Tax Act, in income tax return filed.
2012-13	64
2013-14	54
2014-15	46

 This was stated by Shri Jayant Sinha, Minister of State in Ministry of Finance in written reply to a question in the Lok Sabha today.

Tonnage Tax System: optional taxation regime for qualifying Indian shipping companies with specified opt in windows and filing disclosures. Tonnage Tax System (TTS) is an optional tax regime for qualifying Indian shipping companies under Chapter XII-G (sections 115V-115VZC) of the Income Tax Act, effective from assessment year 2005-06. Companies could opt during the initial window from 1 October 2004 to 31 December 2005, while companies incorporated or qualifying later may opt within three months of incorporation or first qualifying. Reporting in income-tax returns shows 64 companies for 2012-13, 54 for 2013-14, and 46 for 2014-15 disclosed income under Chapter XII-G.