Income-tax Act, 2025

Computation of tonnage income - Section 227

Computation of tonnage income.

227. (1) The tonnage income of a tonnage tax company for a tax year shall be the aggregate of the tonnage income of each qualifying ship computed as per sub-sections (2) and (3).

(2) For the purposes of sub-section (1), the tonnage income of each qualifying ship shall be computed as per the following formula:

TI = DTI N

where,

TI = the tonnage income of each qualifying ship;

DTI = the daily tonnage income of each qualifying ship;

N = the number of days in the tax year or in part of the tax year in case the ship is operated by the company as a qualifying ship for only part of the tax year.

(3) For the purposes of sub-section (2), the daily tonnage income of a qualifying ship having tonnage referred to in column B of the Table below shall be the amount specified in the corresponding entity in column C thereof:

TABLE

Sl. No.Qualifying ship having net tonnageAmount of daily tonnage income

ABC

1.Up to 1000.Rs. 70 for each 100 tons.

2.Exceeding 1000 but not more than 10000.Rs. 700 plus Rs. 53 for each 100 tons exceeding 1000 tons.

3.Exceeding 10000 but not more than 25000.Rs. 5470 plus Rs. 42 for each 100 tons exceeding 10000 tons.

4.Exceeding 25000.Rs. 11770 plus Rs. 29 for each 100 tons exceeding 25000 tons.

(4) For the purposes of this Part of the Chapter, the tonnage shall

(a) mean the tonnage of a ship or inland vessel, as the case may be, indicated in the 37[valid certificate] referred to in sub-section (9); and

(b) include the deemed tonnage, being the tonnage in respect of an arrangement of purchase of slots, slot charter and an arrangement of sharing of break-bulk vessel, computed in the manner, as may be prescribed.

(5) The tonnage shall be rounded off to the nearest multiple of hundred tons and for this purpose any tonnage consisting of kilograms shall be ignore .... To read the full section download the app from Google Play store