Just a moment...

⚠✕
❮ Top
☎ Help
☰
×

By creating an account you can:

Logo TaxTMI
Keyword Search :
AI Tools : New
Ask tax questions in natural language. Powered by AI trained on the TaxTMI legal database. Use AI Tools ➞
Call Us / Help / Feedback✕

Contact Us At :

✉ E-mail: [email protected]

✆ Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters0/2000
Make Most of Text Search ✕
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
    6. Text Search
  6. The system will try to fetch results that contains ALL your words.
  7. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
    8. Text Search
╳
Add to...
You have not created any category. Kindly create one to bookmark this item!
✕
Create New Category
Hide
Title :
Description :
❮❮ Hide
❮ Default View
Expand ❯❯
Close ✕
🔎 TMI Notes - Adv. Search ❯
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text ❯
  • Main Text
  • Main Text + AI Text
  • AI Text
Law:
---- All Laws----❯
  • ---- All Laws----
  • Benami Property
  • Bill
  • Central Excise
  • Companies Law
  • Customs
  • DGFT
  • FEMA
  • GST
  • GST - States
  • IBC
  • Income Tax
  • Indian Laws
  • Money Laundering
  • SEBI
  • SEZ
  • Service Tax
  • VAT / Sales Tax
Types:
---- All Types ---- ❯
  • ---- All Types ----
  • Act Rules
  • Case Laws
  • Circulars
  • Manuals
  • News
  • Notifications
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
RelevanceDefaultDate
    Act RulesBills
    Hierarchy of Income-tax Authorities in India : Clause 236 of the Income Tax Bill, 2025 Vs. Section 1...
    Act RulesBills
    Exclusion from the Indian Tonnage Tax Regime : Clause 234(4)-(7) of the Income Tax Bill, 2025 Vs. Se...
    Act RulesBills
    Anti-Abuse Safeguards in the Indian Tonnage Tax Regime : Clause 234(1)-(3) of the Income Tax Bill, 2...
    Act RulesBills
    Temporary Cessation and Qualifying Status under India's Tonnage Tax Regime : Clause 232(22)-(23) of ...
    Act RulesBills
    Continuity of Tonnage Tax Benefits in Shipping Sector Demergers : Clause 233(5)-(6) of Income Tax Bi...
    Act RulesBills
    Continuity of Tonnage Tax Benefits in Shipping Amalgamations : Clause 233(1)-(4) of the Income Tax B...
    Act RulesBills
    Determination of Tonnage for Shipping Companies under Indian Tax Law : Clause 227(9) of the Income T...
    Act RulesBills
    Compliance Requirements under India's Tonnage Tax Regime : Clause 232(21) of Income Tax Bill, 2025 v...
    Act RulesBills
    Charter-in Limits under India's Tonnage Tax Regime : Clause 232(15)-(20) of the Income Tax Bill, 202...
    Act RulesBills
    Minimum Training Mandates in India's Tonnage Tax Framework : Clause 232(12)-(14) of the Income Tax B...
    Act RulesBills
    Evolving Compliance Obligations under the Tonnage Tax Scheme: Clause 232(1)-(11) of the Income Tax B...
    Act RulesBills
    Examination of provision of Disqualification from Tonnage Tax Scheme : Clause 231(12) of the Income ...
    Act RulesBills
    Examining Renewal Provisions for Tonnage Tax in Indian Shipping Taxation : Clause 231(10)-(11) of In...
    Act RulesBills
    Duration and Cessation of Tonnage Tax Option : Clause 231(8)-(9) of the Income Tax Bill, 2025 Vs. Se...
    Act RulesBills
    Procedural framework for opting into the tonnage tax scheme : Clause 231(1)-(7) of Income Tax Bill, ...
    Act RulesBills
    Legal and Practical Implications of Excluding Tonnage Tax Profits from Book Profits in Indian Shippi...
    Act RulesBills
    Capital Gains taxation on Qualifying Ships : Clause 229(8) to (10) of the Income Tax Bill, 2025 Vs. ...
    Act RulesBills
    Loss Set-Off and Apportionment in the Shipping Industry : Clause 230(2)-(4) of the Income Tax Bill, ...
    Act RulesBills
    Exclusion of Deductions and Loss Set-Off under the Tonnage Tax Regime : Clause 230(1) of the Income ...
    Act RulesBills
    Depreciation and Asset Classification under Tonnage Tax : Clause 229(1)-(7) of the Income Tax Bill, ...
❮
❯
❯❯
MaximizeMaximizeMaximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

    +

    Are you sure you want to delete "My most important" ?

    NOTE:

    Open Link
    Notes
    Showing Results for :
    Reset Filters
    Results Found:
    Show All SummariesHide All Summaries
    Act RulesBills
    Hierarchy of Income-tax Authorities in India : Clause 236 of the Income Tax Bill, 2025 Vs. Section 1...
    Show AI Summary
    Hierarchy of tax authorities clarified: consolidation and streamlined nomenclature aim to centralise appellate functions and improve clarity.
    Clause 236 consolidates the hierarchy of income-tax authorities-from the Central Board of Direct Taxes to Inspectors and Tax Recovery Officers-streamlining nomenclature and grouping alternative designations. It notably omits Deputy Commissioners (Appeals), signalling possible consolidation of first-level appellate functions at higher levels, and leaves allocation of specific powers and appellate responsibilities to subordinate rules and notifications.
    Act RulesBills
    Exclusion from the Indian Tonnage Tax Regime : Clause 234(4)-(7) of the Income Tax Bill, 2025 Vs. Se...
    Show AI Summary
    Tonnage tax exclusion: anti abuse power to remove companies from the regime where transactions lack bona fide commercial purpose.
    Clause 234(4)-(7) empowers the Assessing Officer to exclude a tonnage tax company by written order where transactions amount to an abuse of the tonnage tax scheme, operating retrospectively from the first day of the tax year in which the transaction was entered into; exclusion requires prior show cause notice and higher-level approval, and does not apply where the company satisfies the Assessing Officer that the transaction was a bona fide commercial arrangement not entered into for tax advantage.
    Act RulesBills
    Anti-Abuse Safeguards in the Indian Tonnage Tax Regime : Clause 234(1)-(3) of the Income Tax Bill, 2...
    Show AI Summary
    Anti-abuse safeguards in tonnage tax: exclusion applies where arrangements produce tax advantages for non-eligible activities.
    Clause 234(1)-(3) excludes the tonnage tax scheme where a tonnage tax company is party to any transaction or arrangement that constitutes an abuse by resulting, or that would but for the clause have resulted, in a tax advantage for persons other than the tonnage tax company or for the company in respect of its non-tonnage activities. "Tax advantage" includes manipulation of expense or interest allowances or cost allocation affecting non-tonnage income or loss, and transactions producing more than ordinary profits from tonnage tax activities.
    Act RulesBills
    Temporary Cessation and Qualifying Status under India's Tonnage Tax Regime : Clause 232(22)-(23) of ...
    Show AI Summary
    Temporary cessation of operations preserves tonnage tax continuity, but temporary loss of qualifying status suspends benefits for that period.
    A company is deemed to be operating a qualifying ship for tonnage tax purposes during periods of temporary cessation of operations, so long as the cessation is not permanent; however, a ship that temporarily ceases to meet the statutory criteria of a qualifying ship is excluded from qualifying status for the period of non-qualification and cannot attract tonnage tax benefits during that time.
    Act RulesBills
    Continuity of Tonnage Tax Benefits in Shipping Sector Demergers : Clause 233(5)-(6) of Income Tax Bi...
    Show AI Summary
    Continuity of tonnage tax benefits preserves scheme application for qualifying companies after demerger, subject to statutory conditions.
    Where a demerged company transfers its business to a resulting company before expiry of its tonnage tax option, the tonnage tax scheme shall, subject to other provisions, apply to the resulting company for the unexpired period if it is a qualifying company; similarly, the demerged company retains its option for the unexpired period if it continues to be a qualifying company, with both continuities conditional on statutory eligibility, procedural compliance, and anti-avoidance requirements.
    Act RulesBills
    Continuity of Tonnage Tax Benefits in Shipping Amalgamations : Clause 233(1)-(4) of the Income Tax B...
    Show AI Summary
    Continuity of tonnage tax: amalgamated qualifying shipping companies retain the scheme subject to qualifying status and option deadlines.
    Clause 233(1)-(4) secures continuity of the tonnage tax regime on amalgamation by applying the scheme to the amalgamated company if it remains a qualifying company, requiring non-tonnage amalgamated companies to elect the scheme within a prescribed short period, granting the amalgamated entity the longest unexpired option period when multiple merging companies are under the scheme, and excluding entities that failed to elect during the original implementation window from accessing the regime post-amalgamation.
    Act RulesBills
    Determination of Tonnage for Shipping Companies under Indian Tax Law : Clause 227(9) of the Income T...
    Show AI Summary
    Tonnage determination by statutory certificates ensures objective tonnage income computation and limits administrative discretion, aligning with international practice.
    The net tonnage for tonnage income must be determined from prescribed certificates: Indian ships by Merchant Shipping Rules or the 1969 Convention certificate as applicable; foreign ships by a DG Shipping licence reflecting Flag State tonnage certificates or other evidence acceptable to the DG; inland vessels by Inland Vessels Act, 2021 certificates. Reliance on statutory certificates is central, reducing subjective measurement and constraining administrative assessment to verification of certificate authenticity.
    Act RulesBills
    Compliance Requirements under India's Tonnage Tax Regime : Clause 232(21) of Income Tax Bill, 2025 v...
    Show AI Summary
    Tonnage tax compliance: separate books and certified accountant's report required or tonnage tax option lapses for the year.
    Clause 232(21) makes the tonnage tax option contingent, each year, on maintaining separate books of account for qualifying ship operations and on furnishing a prescribed, duly signed and verified accountant's report before the specified filing date; failure of either requirement renders the tonnage tax option ineffective for that tax year.
    Act RulesBills
    Charter-in Limits under India's Tonnage Tax Regime : Clause 232(15)-(20) of the Income Tax Bill, 202...
    Show AI Summary
    Charter in cap limits chartered tonnage; breach triggers loss of tonnage tax benefit and possible scheme disqualification.
    Clause 232(15)-(20) limits chartered in net tonnage for tonnage tax electors, requires assessment on average net tonnage with the averaging method prescribed in consultation with the Director General of Shipping, excludes bareboat charter cum demise vessels from charter in calculations, and prescribes loss of tonnage tax benefit for a year of breach and permanent cessation of the option after two consecutive years of breach.
    Act RulesBills
    Minimum Training Mandates in India's Tonnage Tax Framework : Clause 232(12)-(14) of the Income Tax B...
    Show AI Summary
    Minimum training requirement - automatic loss of tonnage tax eligibility after consecutive noncompliance; annual certification required with tax return.
    Companies opting for the tonnage tax regime must train trainee officers as per guidelines of the Director-General of Shipping and furnish an annually issued compliance certificate in the prescribed form with their tax return; sustained non-compliance over consecutive years results in automatic cessation of the company's option for the tonnage tax scheme from the year following the concluding year of default. Delegation to the Director-General allows technical adaptability but leaves open statutory ambiguities on thresholds, partial compliance and transitional treatment.
    Act RulesBills
    Evolving Compliance Obligations under the Tonnage Tax Scheme: Clause 232(1)-(11) of the Income Tax B...
    Show AI Summary
    Tonnage Tax Reserve requirement ties tonnage tax access to reinvestment in qualifying shipping assets under the Bill.
    Clause 232 conditions tonnage tax access on crediting a specified portion of book profit from qualifying shipping activities to a Tonnage Tax Reserve Account, usable within eight years for acquisition of a new ship or inland vessel; interim restrictions prevent distribution or foreign remittance, and proportional re taxation, carryforward rules, and cessation of the option after sustained default enforce compliance.
    Act RulesBills
    Examination of provision of Disqualification from Tonnage Tax Scheme : Clause 231(12) of the Income ...
    Show AI Summary
    Tonnage tax disqualification: companies face a ten-year bar on re-entry after opting out, default, or formal exclusion.
    Clause 231(12) bars a qualifying company from opting for the tonnage tax scheme for ten years where the company: voluntarily opts out; defaults in complying with the specified compliance provisions; or has its option excluded by a formal exclusion order, with the disqualification period measured from the date of the triggering event.
    Act RulesBills
    Examining Renewal Provisions for Tonnage Tax in Indian Shipping Taxation : Clause 231(10)-(11) of In...
    Show AI Summary
    Tonnage tax renewal requires timely application and procedural parity with initial grant, subject to eligibility and potential ineligibility period.
    Clause 231(10) requires renewal of an approved tonnage tax option within one year from the end of the tax year in which the prior option ceases, with renewal discretionary and subject to approval or refusal by the competent authority. Clause 231(11) imports sub sections (1) to (10) to apply equally to renewals, ensuring procedural parity-application format, eligibility checks, opportunity of being heard, timelines and cessation consequences-but leaves unresolved whether benefits continue during pendency or whether delayed applications may be condoned.
    Act RulesBills
    Duration and Cessation of Tonnage Tax Option : Clause 231(8)-(9) of the Income Tax Bill, 2025 Vs. Se...
    Show AI Summary
    Tonnage tax lock in establishes a multi year tenure and automatic cessation for qualification loss or compliance defaults.
    Clause 231(8)-(9) provides that an approved tonnage tax option remains in force for ten years from the tax year of exercise, and ceases from the tax year in which the company ceases to qualify, defaults on compliance under section 232(1)-(20), is excluded under the exclusion provision, or voluntarily declares in writing to the Assessing Officer that the part will not apply; on cessation, shipping profits are computed under the general provisions of the Act.
    Act RulesBills
    Procedural framework for opting into the tonnage tax scheme : Clause 231(1)-(7) of Income Tax Bill, ...
    Show AI Summary
    Tonnage tax opting procedure ensures time-bound approval and procedural fairness under the updated legislative framework.
    A qualifying company must apply in the prescribed form to the Joint Commissioner within the statutory window; the Commissioner may call for documents, must afford an opportunity of being heard before refusing, and must communicate a written order within a set time measured from the end of the processing quarter. On approval, the tonnage tax regime applies from the tax year in which the option is exercised, with transitional provisions for IFSC units and further clauses governing duration, cessation, renewal and a bar on re-entry.
    Act RulesBills
    Legal and Practical Implications of Excluding Tonnage Tax Profits from Book Profits in Indian Shippi...
    Show AI Summary
    Exclusion of book profits: tonnage tax income is removed from MAT computation to preserve the presumptive shipping regime.
    Clause 228(16) excludes the book profit or loss derived from the activities of a tonnage tax company, as defined in Clause 228(1), from the company's book profit for the purposes of section 206, thereby preventing MAT from applying to profits attributable to qualifying core and incidental shipping activities; the exclusion operates alongside detailed provisions on caps for incidental income, allocation of costs and depreciation, treatment of non qualifying ships, and transfer pricing adjustments.
    Act RulesBills
    Capital Gains taxation on Qualifying Ships : Clause 229(8) to (10) of the Income Tax Bill, 2025 Vs. ...
    Show AI Summary
    Capital gains on qualifying ships taxed under tonnage tax regime with WDV computed for block of qualifying assets.
    Profits or gains on transfer of capital assets forming part of the block of qualifying ships are chargeable to income-tax, with capital gains computed under the capital gains provisions specified in the Bill. For that computation, references to "written down value of the block of assets" are to be read as the "written down value of the block of qualifying assets", and that WDV is to be determined by the method prescribed in sub-section (2) of Clause 229.
    Act RulesBills
    Loss Set-Off and Apportionment in the Shipping Industry : Clause 230(2)-(4) of the Income Tax Bill, ...
    Show AI Summary
    Tonnage tax loss set off limited to shipping income; pre option losses deemed set off and apportionment must be reasonable.
    Clause 230(2)-(4) (and mirror Section 115VM) deem pre option losses attributable to the tonnage tax business to have been set off against relevant shipping income while under the tonnage tax regime, bar their set off against non shipping income after opting in, and require any necessary apportionment to be made on a reasonable basis, creating documentary and evidentiary obligations and potential disputes over apportionment and the definition of relevant shipping income.
    Act RulesBills
    Exclusion of Deductions and Loss Set-Off under the Tonnage Tax Regime : Clause 230(1) of the Income ...
    Show AI Summary
    Tonnage tax exclusion: carry forward and deductions barred, creating a self contained computation regime for shipping companies under new bill
    Clause 230(1) creates a self contained tonnage tax computation by deeming all business losses, allowances and deductions to have been given full effect in their year of origin, prohibiting carry forward or set off of shipping business losses once under the tonnage regime, excluding general chapter based deductions from tonnage profits, and requiring written down values of assets to be computed as if depreciation had been claimed and allowed each relevant year.
    Act RulesBills
    Depreciation and Asset Classification under Tonnage Tax : Clause 229(1)-(7) of the Income Tax Bill, ...
    Show AI Summary
    Depreciation under tonnage tax: explicit WDV allocation formulas clarify asset classification and continuity of depreciation claims.
    Clause 229(1)-(7) mandates that, on entering the tonnage tax regime, depreciation be computed on the written down value attributable to qualifying ships by dividing the existing block WDV between qualifying and non qualifying assets using explicit proportional formulas; separate qualifying asset blocks are created, WDV is transferred proportionally upon reclassification, intra year depreciation is apportioned by days of use, and the resulting WDV blocks are deemed carried forward from the preceding year to preserve continuity.

    TMI Notes

    Back

    All TMI Notes

    Showing Results for :
    Reset Filters
      No Records Found

      TMI Notes

      Home› TMI Notes › Bills › Act-Rules › Category › This
      Back

      All TMI Notes

      whatsappJoin Channel
      Showing Results for : Reset Filters
      Bills

      Site Restoration Fund: Clause 49 and Schedule X of the Income Tax Bill, 2025 vs. Section 33ABA of the Income Tax Act, 1961

      6 March, 2025

      Contents
      Acts
      Rules & Regulations
      Summary
      Note

      Note

      -

      Bookmark

      Print

      Print

      Print Options

      Clause 49 Site Restoration Fund.

      Income Tax Bill, 2025

      Introduction

      The Income Tax Bill, 2025 introduces significant changes through Clause 49, read with Schedule X, concerning the Site Restoration Fund for businesses involved in the prospecting, extraction, or production of petroleum or natural gas in India. This provision is designed to replace and update the existing framework u/s 33ABA of the Income Tax Act, 1961. The primary objective is to streamline the process of deductions related to site restoration funds and align them with modern economic and environmental considerations. This article provides a comprehensive analysis of the new provisions, compares them with the existing law, and discusses the implications for stakeholders.

      Objective and Purpose

      The legislative intent behind Clause 49 and Schedule X is to provide a structured mechanism for businesses in the petroleum and natural gas sectors to manage site restoration obligations. The provisions aim to ensure that adequate funds are set aside for environmental restoration post-extraction activities, thereby promoting sustainable business practices. Historically, Section 33ABA served a similar purpose, but the new provisions reflect a more contemporary approach, considering advancements in environmental policy and business practices.

      Detailed Analysis

      Clause 49 of the Income Tax Bill, 2025

      Clause 49 allows deductions for businesses engaged in petroleum or natural gas extraction, contingent on deposits made into a special or site restoration account. The deductions are calculated based on deposits as per Schedule X, which outlines specific rules and conditions for these accounts.

      Schedule X of the Income Tax Bill, 2025

      • Quantum of Deduction: The deduction is limited to the lesser of the total deposit in the specified account or 20% of the profits from the business, calculated before other deductions.
      • Conditions for Claiming Deduction: The assessee must have an agreement with the Central Government and maintain audited accounts. Deposits must be made by the end of the tax year into specified accounts.
      • Withdrawal from Specified Account: Withdrawals are restricted to purposes specified in the schemes. If funds are misused, they are treated as taxable income.
      • No Deduction for Expenditure Met Through Withdrawn Amounts: Expenditures funded by withdrawals from the specified account are not deductible.
      • Sale or Transfer of Assets: If assets acquired through the scheme are sold within eight years, related deductions are reversed and taxed as income.

      Comparison with Section 33ABA of the Income Tax Act, 1961

      • Similarities: Both provisions allow deductions based on deposits into specified accounts for site restoration. They share similar conditions regarding the agreement with the Central Government and the need for audited accounts.
      • Differences:
        • Schedule X introduces more detailed conditions for withdrawals and specifies penalties for misuse of funds.
        • The new provisions emphasize environmental sustainability and compliance with updated government schemes.
        • There is a clearer definition of "specified articles or things" that cannot be purchased with withdrawn funds under the new bill.

      Practical Implications

      The new provisions under Clause 49 and Schedule X will impact businesses by imposing stricter compliance requirements for managing site restoration funds. Companies must ensure that deposits and withdrawals align with the specified schemes to avoid taxation on misused funds. The emphasis on environmental restoration aligns with global trends towards sustainable business practices, potentially affecting investment and operational strategies in the sector.

      Comparative Analysis

      Compared to international standards, the updated provisions bring Indian tax law closer to global best practices in environmental accountability for resource extraction industries. The focus on detailed compliance and auditing requirements reflects a shift towards greater transparency and accountability.

      Conclusion

      Clause 49 and Schedule X of the Income Tax Bill, 2025 represent a significant evolution in the regulatory framework for site restoration funds in India. By enhancing the existing provisions u/s 33ABA, the new law aims to promote sustainable practices while ensuring compliance with modern environmental standards. Businesses in the petroleum and natural gas sectors must adapt to these changes to optimize their tax positions and support environmental stewardship.

       

      Full Text:

      Clause 49 Site Restoration Fund.

      Topics

      ActsIncome Tax
      Next ➔