Section 115VJ of Income Tax Act for AY 2023-24

Section 115VJ of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Treatment of common costs.

Amended and updated notes on section 115VJ 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 treatment of common costs.

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 115VJ of IT Act 1961-2023 provides for treatment of common costs.

Recently, we have discussed in detail section 115VI (Relevant shipping income) of IT Act 1961. Today, we learn the provisions of section 115VJ of Income-tax Act 1961. The amended provision of section 115VJ 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 115VJ 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-115VJ: Treatment of common costs

Section 115VJ(1) of Income Tax Act

Where a tonnage tax company also carries on any business or activity other than the tonnage tax business, common costs attributable to the tonnage tax business shall be determined on a reasonable basis.

Section 115VJ(2) of Income Tax Act

Where any asset, other than a qualifying ship, is not exclusively used for the tonnage tax business by the tonnage tax company, depreciation on such asset shall be allocated between its tonnage tax business and other business on a fair proportion to be determined by the Assessing Officer, having regard to the use of such asset for the purpose of the tonnage tax business and for the other business.


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