Chargeable gains from the transfer of tonnage tax assets

Any revenues or gains resulting from the transfer of a capital asset that is an asset belonging to the block of qualifying assets will be subject to income tax in accordance with the provisions of section 45 read with section 50, and the capital gains so arising will be calculated in pursuance of the provisions of sections 45 to 51. With the caveat that the requirements of Section 50 will apply as if the "written down value of the block of assets" had been replaced with the "written down value of the block of eligible assets" for the purposes of calculating such profits or gains. Gather information about tax deduction through our portal.

"Written down value of the block of qualifying assets" refers, for the objectives of this Chapter, to the written down value calculated in accordance with sub-section (2) of section 115VK.

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Absence of loss

For any losses incurred by a company prior to exercising its option for the tonnage tax scheme and that are attributable to its tonnage tax business, Section 72 shall apply as if such losses had been offset against the relevant shipping revenue in any prior years when the company is subject to the tonnage tax scheme. The losses mentioned in the aforementioned sub-section are not allowed to be offset against any other revenue in any prior year that began on or after the corporation exercised its option under section 115VP, save from relevant shipping income.

Any apportionment required to calculate the losses mentioned in the aforementioned sub-section must be done so on a fair basis.

For the purposes of section 115JB, the book profit or loss attributable to the operations of a tonnage tax company, as defined in sub-section (1) of section 115V-I, will be disregarded.

The minimum training requirements established by the Director General of Transport and made public by the Central Government in the Official Gazette must be followed by a tonnage tax company. All other operations or activities conducted by the corporation should not be deemed to be a part of the business of running eligible ships. Tonnage business profits must be calculated separately from all other business profits and gains and are subject to taxation under the heading "Profit and Gain of Business or Profession."

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