Income-tax Act, 2025

Relevant shipping income and exclusion from book profit - Section 228

Relevant shipping income and exclusion from book profit.

228. (1) For the purposes of this Part, the relevant shipping income of a tonnage tax company means

(a) its profits from core activities referred to in sub-section (3); and

(b) its profits from incidental activities referred to in sub-section (7).

(2) Where the aggregate of all such incomes specified in sub-section (1)(b) exceeds 0.25% of the turnover from core activities referred to in sub-section (3), such excess shall not form part of the relevant shipping income for the purposes of this Part and shall be taxable under the other provisions of this Act.

(3) The core activities of a tonnage tax company shall be

(a) its activities from operating qualifying ships; and

(b) other ship-related or inland vessel related activities, as the case may be, as follows:

(i) shipping contracts in respect of

(A) earning from pooling arrangements;

(B) contracts of affreightment;

(ii) specific shipping trades, being

(A) on-board or on-shore activities of passenger ships 39[or inland vessels] comprising of fares and food and beverages consumed on-board;

(B) slot charters, space charters, joint charters, feeder services and container box leasing of container shipping.

(4) For the purposes of sub-section (3)(b)(i),

(a) "pooling arrangement" means an agreement between two or more persons for providing services through a pool or operating one or more ships or inland vessels as the case may be, and sharing earnings or operating profits on the basis of mutually agreed terms;

(b) "contract of affreightment" means a service contract under which a tonnage tax company agrees to transport a specified quantity of specified products at a specified rate, between designated loading and discharging ports over a specified period.

(5) The Central Government, if it considers necessary or expedien .... To read the full section download the app from Google Play store