By TIOL News Service

NEW DELHI, MARCH 22, 2015: THE Government has introduced Tonnage Tax System (TTS). The Finance Act (No.2), 2004 introduced Tonnage Tax System (TTS) for taxation of income derived from shipping activities by an Indian Company.

A new Chapter XII-G (containing sections from 115V to 115VZC) was inserted in the Income Tax Act 1961 to provide for special provisions relating to taxation of shipping companies with effect from the assessment year 2005-06.

The Tonnage Tax System is an optional scheme for qualifying Indian shipping company. Under the scheme, an existing qualifying company was allowed to opt for the scheme during the period from 1 st October, 2004 to 31 st December 2005 (‘initial period'). A company incorporated after the initial period or a company incorporated before the initial period but which becomes a qualifying company for the first time after the initial period may opt for the scheme within three months of the date of its incorporation or the date on which it becomes a qualifying company, as the case may be.

The number of (assessment-year wise) of the companies which have disclosed income under Chapter XII-G (special provisions relating to income tax shipping companies) of the Income Tax Act, as per the income tax returns filed by the companies, is as under:

This was stated by Jayant Sinha, Minister of State in Ministry of Finance in written reply to a question in the Lok Sabha on Friday.