TaxTMI 
TaxTMI 
Comparison of section 230 "Exclusion of deduction, loss, set off, etc." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)
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.... are to be excluded. The provision affects tonnage tax companies (taxpayers) and the tax department; the effective/commencement date is Not stated in the document. Background & Scope Statutory hooks: Clause 230 is located in the Bill under "Special provisions relating to income of shipping companies" and operates "Irrespective of anything contained in any other provision of this Act" for computation of tonnage income of a tonnage tax company for any tax year in which it is chargeable to tax as per the Part addressing tonnage tax. The clause addresses interplay with sections 28 to 52, sections in Chapter VIII, section 33 (depreciation), section 112 and specific subsections of sections 108, 109, 112 and 116. Definitions of "tonnage tax comp....
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....vant shipping income in any of the tax years when the company is under the tonnage tax scheme. * The losses referred to in sub-section (2) shall not be available for set off against any income other than relevant shipping income in any tax year beginning on or after the company exercises its option u/s 231. * Any apportionment necessary to determine the losses referred to in sub-section (2) shall be made on a reasonable basis. Interpretation * The text establishes a statutory scheme that isolates the tax treatment of tonnage income and the losses/deductions related to the qualifying shipping business. The provision operates by prescribing that prior rules on losses and deductions (sections 28-52) be treated as having been applied wit....
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....x-under sub-section (2), those pre-option losses attributable to the qualifying ships are to be treated as if set off against relevant shipping income in the years the company is under the tonnage tax scheme. Specific numeric computation or mechanics are Not stated in the document. * Example 2: A company under the tonnage tax regime cannot carry forward or set off a loss that falls within the listed sections (108(1), 108(2)(a), 109, 112(1), 116(1)) to offset non-shipping income while under the scheme; exact treatment for partial years or mixed business incomes is Not stated in the document. Interplay The clause expressly cross-references and modifies the operation of multiple provisions: sections 28-52 (presumably general heads of incom....
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....s entirety. This narrows the exclusion in the enacted provision relative to the Bill (to the extent different subsections exist in section 109), but the content of those subsections is not included in the documents. * Document status and accompanying note: Document 2 is expressly identified as "Clause 230" of the Income Tax Bill, 2025 - Old Version - and includes a short explanatory sentence: "Clause 230 of the Bill seeks to provide for general exclusion of losses, deductions and set off including the accrued losses incurred or claimed prior to opting of tonnage tax scheme by the company." Document 1 is presented as "Section 230 of Income-tax Act, 2025" (enacted text) and omits that explanatory sentence. * Practical impact: Document 2 i....
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....al details are Not stated in the document. * Record-keeping/evidence points: The provision's restriction on carry-forward/set-off and the requirement to apportion pre-option losses "on a reasonable basis" imply a need for clear records demonstrating the attribution of losses to qualifying ships, the computations showing deductions treated as given effect in the relevant year, and the basis of any apportionment. Specific documentary standards, evidentiary thresholds or forms are Not stated in the document. Key Takeaways * Clause 230 confines the tax consequences of qualifying shipping operations under the tonnage tax option by excluding certain losses, deductions and set-offs from cross-utilisation outside the shipping income stream....