Comparison of section 226 "Tonnage tax scheme." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....dicates, potentially inland vessels). Effective date/decision date: Not stated in the document. Background & Scope Statutory hooks: Clause 226 forms part of the Bill's Part dealing with "Special provisions relating to income of shipping companies" and interacts with sections 227, 228(1) and the option procedure in section 231. The clause defines the meaning of "operating a ship" for the Part, sets out that a tonnage tax company shall compute profits from qualifying shipping business under the tonnage tax scheme, treats the tonnage business as a separate business, requires separate computation of profits, makes the scheme available only if an option is exercised u/s 231, and clarifies tax treatment of tonnage income and relevant shippi....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....visions of the Part, the tonnage income is to be computed as per section 227 and "deemed to be the profits chargeable under the head 'Profits and gains of business or profession'", and the relevant shipping income referred to in section 228(1) shall not be chargeable to tax. Interpretation The clause signals a legislative intent to provide an elective, self-contained tax computation regime for qualifying shipping operations, distinct from general profit computation. The textual structure emphasises separability (distinct business, separate computation) and voluntariness (option u/s 231). The inclusion of charter-in arrangements (including partial charters such as slot or space charters) indicates a purposive effort to capture comm....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... explicitly included within the clause's ambit so that such income may fall within the tonnage tax computation if the company qualifies and opts in. Not stated in the document: whether partial charter arrangements produce pro rata tonnage computations or any allocation rule. Interplay The clause explicitly cross-references sections 227 (computation of tonnage income), 228(1) (relevant shipping income), and section 231 (option mechanism). The document does not set out the content of those sections; therefore interpretation of the tonnage scheme requires reading those cross-referenced provisions. Not stated in the document: interactions with other Parts of the Act, rules, notifications, or international tax provisions (e.g., treaty impl....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e law. * Practical impact: None on substantive tax liabilities; only aids reader comprehension in the Bill version. * No other substantive differences are apparent in the operative subsections (2)-(7): both texts impose separate computation of tonnage profits, require an option u/s 231, and provide that relevant shipping income referred to in section 228(1) shall not be chargeable to tax where the tonnage scheme applies. * Practical impact: Continuity in the scheme's mechanics; operators and tax administrators can rely on the same core structure in both drafts. Practical Implications * Compliance and risk areas: companies operating ships must determine whether they qualify for the tonnage regime and whether to exercise the opti....