Section 233 — Procedural Compliance | ITA 2025

Section 233 — - TONNAGE TAX -- PROCEDURAL COMPLIANCE

Section 233 is part of the Tonnage Tax framework (ss. 225-235), the alternative tax regime for qualifying Indian shipping companies. The substantive equivalent of 1961 s. 115VR. The provision is integral to operationalising the tonnage-tax-as-alternative-to-PGBP regime introduced by FA 2004 (1961 Chapter XII-G). Practitioner relevance: limited to operational shipping companies (SCI / Great Eastern Shipping / similar).

Statutory text — Income-tax Act, 2025

Marginal note -- Procedural Compliance

233.

(1) Where there has been an amalgamation of a company with another company or companies, then, subject to the other provisions of this section, the provisions relating to the tonnage tax scheme shall, as far as may be, apply to the amalgamated company, if it is a qualifying company.

(2) Where the amalgamated company is not a tonnage tax company, it shall exercise an option for tonnage tax scheme under section 231(1) within three months from the date of the approval of the scheme of amalgamation.

41. Inserted by the Finance Act, 2026, w.e.f. 1-4-2026.

(3) Where the amalgamating companies are tonnage tax companies, the provisions of this Part shall, as far as may be, apply to the amalgamated company for such period as the option for tonnage tax scheme which has the longest unexpired period continues to be in force.

(4) Where one of the amalgamating companies is a qualifying company as on the 1st October, 2004 and which has not exercised the option for tonnage tax scheme before the 1st January, 2005, the provisions of this Part shall not apply to the amalgam- ated company and the income of the amalgamated company from the business of operating qualifying ships shall be computed as per the other provisions of this Act.

(5) Where in a scheme of demerger, the demerged company transfers its business to the resulting company before the expiry of the option for tonnage tax scheme, then, subject to the other provisions of this Part, the tonnage tax scheme shall, as far as may be, apply to the resulting company for the unexpired period, if it is a qualifying company.

(6) The option for tonnage tax scheme in respect of the demerged company shall remain in force for the unexpired period of the tonnage tax scheme if it continues to be a qualifying company. Avoidance of tax and exclusion from tonnage tax scheme.

Tonnage tax framework operational provision. Section 233 addresses procedural compliance -- a key component of qualifying shipping company taxation under the alternative tonnage-based regime introduced by FA 2004. The regime allows shipping companies to compute taxable income on a notional tonnage basis (per net tonnage of qualifying ships per day) rather than actual profit, reducing tax volatility from highly cyclical shipping industry economics. Once option exercised under s. 231, binding for 10 years per s. 232. PRACTITIONER: limited audience -- few qualifying Indian shipping companies; documentation extensive given technical nature.

CROSS-REFERENCES

Section 225 -- Tonnage tax charge.
Section 226-235 -- Tonnage tax framework.
Sections 26-54 -- Regular PGBP (overridden).
Merchant Shipping Act 1958.

← All sections (537)Act 2025 hub

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
INCOME-TAX ACT, 2025 -- s. 233	INCOME-TAX ACT, 1961 -- s. 115VR
Procedural Compliance	1961 s. 115VR