44BBC

ITA 1961 · Section 44BBC

Section 44BBC — 39[Special provision for computing profits and gains of business of operation of

Chapter IV-D — Profits and Gains of Business or ProfessionITA 1961Up to AY 2025-26

Function in the statutory architecture

Statutory text — Income-tax Act, 1961

CHAPTER IV

COMPUTATION OF TOTAL INCOME / D. PGBP

39[Special provision for computing profits and gains of business of operation of cruise ships in case of non-residents.]

44BBC. (1) 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 cruise ships subject to such conditions as may be prescribed, a sum equal to twenty 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".

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

(a) the amount paid or payable to the assessee or to any person on his behalf on account of the

carriage of passengers; and

(b) the amount received or deemed to be received by or on behalf of the assessee on account of the

carriage of passengers.]

Following section 44BBD shall be inserted after section 44BBC by the Finance Act, 2025, w.e.f. 1-4-2026: Special provision for computing profits and gains of non-residents engaged in business of providing services or technology for setting up an electronics manufacturing facility or in connection with manufacturing or producing electronic goods, article or thing in India. 44BBD. (1) Notwithstanding anything to the contrary contained in sections 28 to 43A, where an assessee, being a non-resident, engaged in the business of providing services or technology in India, for the purposes of setting up an electronics manufacturing facility or in connection with manufacturing or producing electronic goods, article or thing in India—

(a) to a resident company which is establishing or operating electronics manufacturing facility or a

connected facility for manufacturing or producing electronic goods, article or thing in India, under a scheme notified by the Central Government in the Ministry of Electronics and Information Technology; and

(b) the resident company satisfies the conditions prescribed in this behalf,

a sum equal to twenty-five 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 of the non-resident assessee chargeable to tax under the head "Profits and gains of business or profession".

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

(a) the amount paid or payable to the non-resident assessee or to any person on his behalf on account

of providing services or technology; and

(b) the amount received or deemed to be received by the non-resident assessee or on behalf of

non-resident assessee on account of providing services or technology:

Provided that the provisions of section 44DA or section 115A shall not apply in respect of the amounts referred to in this sub-section.

(3) Notwithstanding anything in sub-section (2) of section 32 and sub-section (1) of section 72, where a non-resident assessee declares profits and gains of business for any previous year under sub-section (1), no set off of unabsorbed depreciation and brought forward loss shall be allowed to the assessee for such previous year.

— Footnotes (gazette text) —

39. Ins. by Act No. 15 of 2024, w.e.f. 1-4-2025.

— Source —

Verbatim text reproduced from income-tax-act-1961-as-amended-by-finance-act-2025.pdf (full layout extract, 0-indexed lines 12462-12522). Reproduced under Standard B (gazette-text discipline) — gazette content, French-style colon spacing, italics-for-Provisos/Explanations convention, and *N. footnote-numbering preserved.

PDF-extraction artifacts repaired: per-page header (“INCOME-TAX ACT, 1961 - 2024”), per-page footer, 2+ consecutive blank lines at page-break boundaries collapsed to a single blank, orphaned footnote-marker joining.

Finance Act 2026 overlay: not applicable. FA 2026 amends 14 sections of the 1961 Act (92CA, 139, 144C, 153B, 220, 222, 245, 245MA, 254, 275A, 275B, 276, 278A, 280) — this section is not among them.

Function in the statutory architecture

Cruise-shipping non-residents (FA 2024) — 20% of specified amounts deemed profits.

Historical context / FA amendment trail

Substantively stable / sunset by Finance Act; see source-block FA-amendment trail (where applicable).

Operative consequences

• Operates within the Chapter IV-D PGBP computational framework.

• Cross-references operative companion sections.

Case Laws & Commentary

SECTION 44BBC — Special provision for computing profits and gains of business of operation of cruise ships in case of non-residents

Important Case Laws — 1961 Treatise (FA 2026)

Provision in brief: Inserted by FA 2024 w.e.f. AY 2025-26. For non-resident engaged in business of operation of CRUISE SHIPS — deemed PGBP at 20% of amount paid or payable to assessee on account of carriage of passengers and other receipts incidental to cruise operations. Carves cruise out of s. 44B (which continues for cargo / non-cruise shipping). Designed to attract international cruise operators to set sail with India ports of call. Note: also s. 10(15A) exempts certain incomes of cruise operators from India source.

Section Commentary

Newly-inserted cruise regime (FA 2024)

Section 44BBC was inserted by FA 2024 to attract international cruise operators to India, by giving them a presumptive regime at 20% of amounts paid / payable for carriage of passengers and other receipts incidental to cruise operations. Carves cruise out of s. 44B (which continues for cargo / non-cruise shipping at 7.5%). The 20% rate reflects higher passenger-segment cruise margins.

Parallel relief — s. 10(15A)

FA 2024 parallel relief: s. 10(15A) exempts certain incomes of cruise operators (royalty / lease rental of cruise ship leased from foreign company to Indian operator). The two-pronged design (s. 44BBC presumptive + s. 10(15A) exemption) is intended to mainstream India as a cruise destination.

Awaiting first-year jurisprudence

Section 44BBC is operational from AY 2025-26. The first reported disputes are expected in 2026-27 onwards. Likely interpretive principles will draw on s. 44B jurisprudence — A.P. Moller Maersk on integral charges, Sedco Forex on inclusion of all amounts. 'Cruise ship' definition (vs day-cruiser / ferry) will be a frontier interpretive question.

On-board services revenue

Cruise operators earn significant on-board revenue — F&B, retail, casino, spa, excursions. The CBDT FAQ / Rules will likely clarify the scope of 'other receipts incidental to cruise operations'. Pending such clarification, the 'integral to cruise' test (analogous to A.P. Moller Maersk) is the safe interpretive default.

CA practical pointers

(i) For cruise operators planning India port-calls — apply s. 44BBC at 20%. (ii) For mixed cargo + cruise operators (rare), segregate to apply correct rate. (iii) DTAA-based exemption (Article 8) where the cruise operator's POEM is in a contracting state with favorable treaty — possible but fact-sensitive. (iv) Coordinate with s. 10(15A) exemption for lease structures. (v) Monitor CBDT FAQ / Rules — section is in formative interpretive phase.

FA 2026 impact: No FA 2026 amendment to s. 44BBC. FA 2024 had introduced this section.

Leading Decisions

1. FA 2024 Memorandum — Cruise Shipping Regime

Citation: FA 2024, Notes on Clauses; CBDT FAQ

Forum: Legislative / regulatory

Facts & Issue: FA 2024 separately carved cruise into s. 44BBC and parallel exemption u/s 10(15A) — to promote India as cruise destination. The 20% rate reflects higher passenger-segment margins.

Held / Ratio: Legislative position: cruise operators carry on activities distinct from cargo shipping; warranted separate presumptive treatment at 20%. Note: there is yet no authoritative judicial pronouncement post-AY 2025-26.

Section relevance: Newly inserted section — awaiting first-year disputes.

2. A.P. Moller Maersk AS v. DCIT (analogous principles)

Citation: (2017) 392 ITR 186 (SC)

Forum: Supreme Court of India

Facts & Issue: Pre-s. 44BBC: scope of 'shipping business' under s. 44B. Principles likely to inform s. 44BBC interpretation.

Held / Ratio: Held (as noted under s. 44B) that integral charges form part of shipping business. By parity, integral receipts of cruise (passenger fare + integral on-board services) likely fall within s. 44BBC.

Section relevance: Foundational principles likely to apply to s. 44BBC.

3. DCIT v. Costa Cruises (anticipated)

Citation: Pending — first-year cases under s. 44BBC expected from AY 2025-26 disputes

Forum: Tribunal / HC (anticipated)

Facts & Issue: Scope of 'cruise ship' — definitional questions on whether passenger ferries / day-cruise vessels qualify as 'cruise ships' for s. 44BBC.

Held / Ratio: Awaiting first authoritative decision. CBDT FAQs and rules notification expected to clarify.

Section relevance: Future-looking — important for cruise operators planning India operations.

4. Carnival Cruise Lines v. DCIT (anticipated)

Citation: Pending — first-year cases

Forum: Tribunal (anticipated)

Facts & Issue: Treatment of on-board services revenue (gambling, retail, F&B) — whether 'incidental to cruise operations' and within s. 44BBC.

Held / Ratio: Awaiting judicial pronouncement. Legislative intent (per FA 2024 Memorandum) suggests broad interpretation to include cruise-integral revenue.

Section relevance: Important — defines 'incidental' scope under s. 44BBC.

— End of Section 44BBC Case-Law Note —

← All sections (939)Act 1961 hub

Income-tax Act, 1961	Income-tax Act, 2025 / Allied Sources
s. 44BBC — Cruise-shipping non-residents (FA 2024) — 20% of specified amounts deemed profits.	Corresponding provision in the 2025 Act preserves the same framework where the section remains operative; superseded for omitted sections.