Summary
- The Tonnage Tax Scheme (TTS) under Chapter XII-G of the Income-tax Act allows eligible Indian shipping companies to compute income on a presumptive basis based on net tonnage rather than actual profits.
- To qualify, companies must be Indian, have their Place of Effective Management in India, own at least one qualifying ship, and primarily engage in shipping operations.
- Income is calculated using fixed daily tonnage rates with no deductions or allowances permitted; the scheme remains valid for ten years upon compliance with specific conditions.
- Non-compliance or abuse can lead to withdrawal of benefits, raising concerns about potential misuse of the scheme for tax advantages.
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