Just a moment...

Top
Help
×

By creating an account you can:

Logo TaxTMI
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
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. 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
    Hierarchy of Income-tax Authorities in India : Clause 236 of the Income Tax Bill, 2025 Vs. Section 1...
    Exclusion from the Indian Tonnage Tax Regime : Clause 234(4)-(7) of the Income Tax Bill, 2025 Vs. Se...
    Anti-Abuse Safeguards in the Indian Tonnage Tax Regime : Clause 234(1)-(3) of the Income Tax Bill, 2...
    Temporary Cessation and Qualifying Status under India's Tonnage Tax Regime : Clause 232(22)-(23) of ...
    Continuity of Tonnage Tax Benefits in Shipping Sector Demergers : Clause 233(5)-(6) of Income Tax Bi...
    Continuity of Tonnage Tax Benefits in Shipping Amalgamations : Clause 233(1)-(4) of the Income Tax B...
    Determination of Tonnage for Shipping Companies under Indian Tax Law : Clause 227(9) of the Income T...
    Compliance Requirements under India's Tonnage Tax Regime : Clause 232(21) of Income Tax Bill, 2025 v...
    Charter-in Limits under India's Tonnage Tax Regime : Clause 232(15)-(20) of the Income Tax Bill, 202...
    Minimum Training Mandates in India's Tonnage Tax Framework : Clause 232(12)-(14) of the Income Tax B...
    Evolving Compliance Obligations under the Tonnage Tax Scheme: Clause 232(1)-(11) of the Income Tax B...
    Examination of provision of Disqualification from Tonnage Tax Scheme : Clause 231(12) of the Income ...
    Examining Renewal Provisions for Tonnage Tax in Indian Shipping Taxation : Clause 231(10)-(11) of In...
    Duration and Cessation of Tonnage Tax Option : Clause 231(8)-(9) of the Income Tax Bill, 2025 Vs. Se...
    Procedural framework for opting into the tonnage tax scheme : Clause 231(1)-(7) of Income Tax Bill, ...
    Legal and Practical Implications of Excluding Tonnage Tax Profits from Book Profits in Indian Shippi...
    Capital Gains taxation on Qualifying Ships : Clause 229(8) to (10) of the Income Tax Bill, 2025 Vs. ...
    Loss Set-Off and Apportionment in the Shipping Industry : Clause 230(2)-(4) of the Income Tax Bill, ...
    Exclusion of Deductions and Loss Set-Off under the Tonnage Tax Regime : Clause 230(1) of the Income ...
    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:

    Notes
    Showing Results for :
    Reset Filters
    Results Found:
    Show All SummariesHide All Summaries
    Act RulesBills
    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
    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
    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
    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
    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
    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
    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
    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
    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
    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
    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
    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
    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
    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
    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
    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
    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
    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
    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
    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

      Back

      All TMI Notes

      whatsappJoin Channel
      Showing Results for : Reset Filters

      Comparison of section 511 "Furnishing of report in respect of international group." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

      17 September, 2025

      Contents
      Acts
      Rules & Regulations
      Summary
      Note

      Note

      -

      Bookmark

      Print

      Print

      Section 511 Furnishing of report in respect of international group

      Income-tax Act, 2025

      At a Glance

      The document reproduces Clause 511 - Income Tax Bill, 2025 - Old Version, setting out reporting obligations for constituent entities of international groups (country-by-country reporting style). It matters for multinational groups with Indian resident constituent entities - both taxpayers (resident constituent entities, parent entities, alternate reporting entities) and the tax administration. Effective date or commencement is Not stated in the document.

      Background & Scope

      Statutory hooks: Clause 511 sits within miscellaneous provisions of the Income Tax Bill, 2025 and proposes a standalone reporting obligation for "international groups". The clause creates duties to notify the prescribed income-tax authority and to furnish reports containing consolidated and constituent-level financial and operational information. Definitions and scope are provided within the clause itself. Any subordinate rules, forms, timelines and thresholds are to be set out "as prescribed" (delegated rule-making).

      Statutory Provision Mode

      Text & Scope

      Clause 511 imposes three principal obligations:

      • Notification (sub-section (1)): Every constituent entity resident in India that is part of an international group whose parent is not resident in India must notify the prescribed income-tax authority in the prescribed form and manner by the prescribed date whether it is the alternate reporting entity and/or provide details of the parent or alternate reporting entity and their jurisdictions.
      • Reporting (sub-section (2)): Every parent entity or alternate reporting entity resident in India must, for each reporting accounting year, furnish a report to the prescribed income-tax authority within twelve months from the end of that reporting accounting year, in the prescribed form and manner.
      • Fallback reporting (sub-section (4)): Where an Indian resident constituent entity is not the parent/alternate reporting entity, it must furnish the report within a prescribed period if the parent is resident in a jurisdiction that (a) is not obligated to file such a report; (b) lacks an agreement with India for exchange of the report; or (c) has experienced a "systemic failure" and that failure has been intimated by the prescribed income-tax authority.
      • Sub-sections (3) and (6) detail report content and exceptions; (7) grants the authority the power to issue notices and require supporting information; (8) provides a consolidated-revenue threshold exemption; and (9) permits application "as prescribed".

      Interpretation

      The text indicates a legislative intent to implement a country-by-country reporting regime targeted at large international groups with constituent entities resident in India. The use of express definitions (e.g., "consolidated financial statement", "parent entity", "constituent entity", "reporting accounting year") demonstrates an intent to align reporting obligations with financial reporting and with international standards for transfer pricing transparency. Several interpretive principles are signalled by the text: alignment with parent-jurisdiction financial periods, deference to prescribed forms and procedures, and reliance on intergovernmental agreements for automatic exchange.

      Exceptions/Provisos

      Key carve-outs and conditions:

      • Threshold exemption (sub-section (8)): The section will not apply if the total consolidated group revenue for the preceding accounting year does not exceed the prescribed amount - the specific monetary threshold is Not stated in the document.
      • Non-application where an alternate reporting entity files in its jurisdiction and certain conditions are met (sub-section (6)): Conditions include the foreign report being required by local law, presence of an exchange agreement between that country and India, absence of any systemic failure communicated by the Indian authority, written designation of the alternate reporting entity, and prior notification under sub-section (1). These are cumulative preconditions.
      • Fallback allocation where multiple Indian resident constituent entities exist (sub-section (5)): If more than one Indian constituent entity exists, any one designated entity may furnish the report provided the group has designated that entity and the information has been conveyed in writing to the prescribed authority.

      Illustrations

      • Example 1: A multinational group with a non-resident parent and one Indian subsidiary that is designated as the alternate reporting entity must notify the income-tax authority in India and, if resident as alternate reporting entity, file the report within 12 months of the reporting accounting year end. (All procedural details - forms/timelines - are Not stated in the document.)
      • Example 2: An Indian permanent establishment (PE) of a foreign enterprise that prepares separate financial statements as a PE falls within "constituent entity" and, if the foreign parent's jurisdiction neither files nor exchanges reports with India, that Indian PE may be required to furnish the report within the prescribed period. (Precise prescribed period is Not stated in the document.)

      Interplay

      The clause expressly contemplates interaction with:

      • Section 159(1) or (2) (via the definition of "agreement") - signalling reliance on specified intergovernmental agreements for exchange.
      • Section 173(c) (for the meaning of "permanent establishment").
      • Prescribed rules/guidelines/conditions that remain to be issued for form, manner, dates and thresholds. The document does not reproduce any subordinate rules or forms. Specific interactions with existing transfer-pricing or information-exchange regimes are Not stated in the document beyond the express reference to agreements for exchange.

      Differences between the Document 1 "Section 511 of Income-tax Act, 2025" and Document 2 "Clause 511 - Income Tax Bill, 2025 - Old Version"

      • Prescription wording: Document 1 repeatedly uses the phrase "as may be prescribed" (e.g., sub-sects (1), (2), (3), (9)), whereas Document 2 often uses the shorter "as prescribed".
        • Practical impact: negligible substantive difference in content; "as may be prescribed" can imply delegation to subordinate legislation, while "as prescribed" is more neutral - both indicate delegated rule-making. In practice, stakeholders should expect rules/guidelines to be issued regardless.
      • Minor phrasing differences: e.g., Document 1 in sub-section (4)(c) reads "where there has been a systemic failure of the country or territory and such failure has been intimated by the prescribed income-tax authority to such constituent entity" while Document 2 reads "where there has been a systemic failure and such failure has been intimated by the prescribed income-tax authority to such constituent entity."
        • Practical impact: none substantive; the enacted text in Document 1 clarifies that the systemic failure is of the foreign country/territory, but Document 2's meaning would be read the same way in context.
      • Overall: there are no material substantive differences in obligations, definitions, thresholds or exceptions between the two texts provided. The principal practical impact arises from the change in status from a Bill clause (Document 2) to an enacted statutory section (Document 1) and minor drafting refinements that preserve the same legal obligations and delegated-rulemaking expectation.

      Practical Implications

      • Compliance and risk areas: Indian resident constituent entities of international groups must track whether their group's parent is resident outside India, determine whether they are designated as alternate reporting entity, and ensure timely notification to the prescribed income-tax authority. Parent or alternate reporting entities resident in India must prepare and file the prescribed report within 12 months of the reporting accounting year end. Failure to notify or file may expose entities to compliance actions under the Act and to information requests under sub-section (7).
      • Record-keeping/evidence: The text requires aggregated country-level financial and operational metrics and constituent-level details; accordingly, entities will need robust consolidated financial statements, country allocation methodologies, documentation of designation as alternate reporting entity, and written communications to the Indian authority. The precise content and format are "as prescribed" and therefore entities must monitor subordinate instruments for technical compliance requirements (not specified in the Bill text).

      Key Takeaways

      • Clause 511 establishes country-by-country style reporting obligations for international groups with Indian resident constituent entities.
      • There is a dual duty: initial notification by Indian resident constituent entities (where parent is non-resident) and annual reporting by Indian parent/alternate reporting entities within 12 months of reporting accounting year end.
      • Fallback reporting obligations apply to Indian resident constituent entities if the parent's jurisdiction does not file, does not exchange, or has a communicated systemic failure.
      • Exemptions hinge on a consolidated revenue threshold for the preceding year; the specific threshold is to be prescribed and is Not stated in the document.
      • The power to request supporting information and documents within defined timelines is provided to the prescribed income-tax authority.
      • Many operational details (form, manner, prescribed dates, exact thresholds) are left to delegated rules; stakeholders must monitor rule-making for compliance specifics.

      Full Text:

      Section 511 Furnishing of report in respect of international group

      Topics

      ActsIncome Tax