Income from business of operating qualifying ships
[Section-225 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Irrespective of anything contained in sections 26 to 54, in the case of a company, the income from the business of operating qualifying ships––
- (a) may, at its option, be computed as per provisions of this Part; and
- (b) such income shall be deemed to be the profits and gains of such business chargeable to tax under the head “Profits and gains of business or profession”.
FAQs on Section 225 of Income Tax Act 2025
What does Section 225 of the Income Tax Act, 2025 deal with?
Section 225 deals with the taxation of income from the business of operating qualifying ships for companies, providing an optional method of income computation.
Who can opt for the provisions of Section 225?
Only companies engaged in the business of operating qualifying ships are eligible to opt for the provisions of this section.
Is the computation method under Section 225 mandatory for eligible companies?
No, it is optional. Companies may choose to compute their income as per Section 225.
What is the effect of opting for Section 225 on other provisions of the Act?
Section 225 overrides the provisions contained in Sections 26 to 54 for the purpose of computing income from qualifying ships.
How is income treated under Section 225 once the option is exercised?
The income computed under this section is deemed to be the profits and gains of the business and is taxable under the head “Profits and gains of business or profession”.
Can a company continue to apply other general provisions if it opts for Section 225?
No, once the option is exercised under Section 225, income from qualifying ships is to be computed solely under this section, irrespective of Sections 26 to 54.
What is meant by a ‘qualifying ship’ under Section 225?
The term ‘qualifying ship’ is not defined in this section itself. It is expected to be defined elsewhere within this Part or related provisions.
When does Section 225 come into effect?
Section 225 is effective from 1st April, 2026.
Does Section 225 apply to non-corporate entities like partnerships or individuals?
No, it applies only to companies.
