Section 44B of Income Tax Act for AY 2023-24

Section 44B of Income Tax Act amended by Finance Act & Rules. Computing profits and gains of shipping business in the case of non-residents.

Amended and updated notes on section 44B 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 special provision for computing profits and gains of shipping business in the case of non-residents.

Chapter IV (Sections 14 to 59) of the Income Tax Act 1961 deals with the provisions related to computation of total income. Section 44B of IT Act 1961-2023 provides for special provision for computing profits and gains of shipping business in the case of non-residents.

Recently, we have discussed in detail section 44AF (special provisions for computing profits and gains of retail business) of IT Act 1961. Today, we learn the provisions of section 44B of Income-tax Act 1961. The amended provision of section 44B 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 44B 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-44B: Computing profits and gains of shipping business in the case of non-residents

Section 44B(1) of Income Tax Act

Notwithstanding anything to the contrary contained in sections 28 to 43A, in the case of an assessee, being a non-resident, engaged in the business of operation of ships, a sum equal to seven and a half per cent of the aggregate of the amounts specified in sub-section (2) 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”.

Section 44B(2) of Income Tax Act

The amounts referred to in sub-section (1) shall be the following, namely :—

  • (i) the amount paid or payable (whether in or out of India) to the assessee or to any person on his behalf on account of the carriage of passengers, livestock, mail or goods shipped at any port in India; and
  • (ii) the amount received or deemed to be received in India by or on behalf of the assessee on account of the carriage of passengers, livestock, mail or goods shipped at any port outside India.

Explanation: For the purposes of this sub-section, the amount referred to in clause (i) or clause (ii) shall include the amount paid or payable or received or deemed to be received, as the case may be, by way of demurrage charges or handling charges or any other amount of similar nature.


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