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

Section 115VQ of Income Tax Act 1961 amended by Finance Act and Income-tax Rules. Period for which tonnage tax option to remain in force.

Amended and updated notes on section 115VQ 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 period for which tonnage tax option to remain in force.

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 115VQ of IT Act 1961-2020 provides for period for which tonnage tax option to remain in force.

Recently, we have discussed in detail section 115VP (method and time of opting for tonnage tax scheme) of IT Act 1961. Today, we learn the provisions of section 115VQ of Income-tax Act 1961. The amended provision of section 115VQ 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 115VQ 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-115VQ: Period for which tonnage tax option to remain in force

Section 115VQ(1) of Income Tax Act

An option for tonnage tax scheme, after it has been approved under sub-section (3) of section 115VP, shall remain in force for a period of ten years from the date on which such option has been exercised and shall be taken into account from the assessment year relevant to the previous year in which such option is exercised.

Section 115VQ(2) of Income Tax Act

An option for tonnage tax scheme shall cease to have effect from the assessment year relevant to the previous year in which—

  • (a) the qualifying company ceases to be a qualifying company;
  • (b) a default is made in complying with the provisions contained in section 115VT or section 115VU or section 115VV;
  • (c) the tonnage tax company is excluded from the tonnage tax scheme under section 115VZC;
  • (d) the qualifying company furnishes to the Assessing Officer, a declaration in writing to the effect that the provisions of this Chapter may not be made applicable to it,

and the profits and gains of the company from the business of operating qualifying ships shall be computed in accordance with the other provisions of this Act.


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