Amended and updated notes on section 115VE of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to manner of computation of income under tonnage tax scheme.
Chapter XIIG (Sections 115V to 115VZC) of the Income Tax Act 1961 deals with the provisions related to special provisions relating to income of shipping companies. Section 115VE of IT Act 1961-2023 provides for manner of computation of income under tonnage tax scheme.
Recently, we have discussed in detail section 115VD (Qualifying ship) of IT Act 1961. Today, we learn the provisions of section 115VE of Income-tax Act 1961. The amended provision of section 115VE is effective for financial year 2022-23 relevant to the assessment year 2023-24.
In this article, you will learn detail of the provisions of section 115VE of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962, regulations, notifications, circulars, orders and Press Release by CBDT, Income Tax Department and the Ministry of Law and Justice, Government of India.
Section-115VE: Manner of computation of income under tonnage tax scheme
Section 115VE(1) of Income Tax Act
A tonnage tax company engaged in the business of operating qualifying ships shall compute the profits from such business under the tonnage tax scheme.
Section 115VE(2) of Income Tax Act
The business of operating qualifying ships giving rise to income referred to in sub-section (1) of section 115V-I shall be considered as a separate business (hereafter in this Chapter referred to as the tonnage tax business) distinct from all other activities or business carried on by the company.
Section 115VE(3) of Income Tax Act
The profits referred to in sub-section (1) shall be computed separately from the profits and gains from any other business.
Section 115VE(4) of Income Tax Act
The tonnage tax scheme shall apply only if an option to that effect is made in accordance with the provisions of section 115VP.
Section 115VE(5) of Income Tax Act
Where a company engaged in the business of operating qualifying ships is not covered under the tonnage tax scheme or, has not made an option to that effect, as the case may be, the profits and gains of such company from such business shall be computed in accordance with the other provisions of this Act.