Section 61 — NR Specific Presumptive Computation | ITA 2025

Section 61 — NR-SPECIFIC PRESUMPTIVE COMPUTATION

Section 61 consolidates several non-resident-specific presumptive regimes of the 1961 Act into a single Table-driven dispensation. Sub-section (1) is non-obstante to ss. 26-54. Sub-section (2) Table covers SIX categories: (1) NR shipping — non-cruise (1961 s. 44B equivalent — 7.5% of A+B); (2) NR cruise-ship operation (newer regime — 20% of A+B; subject to prescribed conditions); (3) NR aircraft operation (1961 s. 44BBA — 5% of A+B); (4) Foreign-co civil construction / turnkey power project, CG-approved (1961 s. 44BBB — 10% of amount); (5) NR services / facilities / plant-on-hire for mineral-oil prospecting / extraction / production (1961 s. 44BB — 10% of A+B); (6) NR services / technology to a resident company setting up electronics-manufacturing facility (newer FA 2024-25 regime — 25% of A+B).

Statutory text — Income-tax Act, 2025

Marginal note — Special provisions for computing profits and gains of certain business activities of certain non-residents

(1) The provisions of sections 26 to 54, to the extent contrary to this section, shall not apply to the manner of computation of profits and gains of the specified business in sub-section (2).

(2) The profits and gains of any specified business as mentioned in column B of the Table below, carried on by a specified assessee as mentioned in column C of the said Table during a tax year, shall be computed in the manner specified in column D thereof, and shall be deemed to be the profits and gains of such business of such assessee chargeable to tax for the said tax year under the head “Profits and gains of business or profession”.

TABLE — Section 61(2)

Sl. No. (A)	Specified Business (B)	Specified Assessee (C)	Profits and Gains of Business / Profession (D)
1.	Business of operation of ships, other than cruise ships referred to in Serial number 2.	Non-resident.	7.5% of (A+B), where,— A = sum on account of carriage of passengers, livestock, mail or goods shipped at any port in India, whether paid or payable, in or outside India, to the assessee or any other person on his behalf (including demurrage, handling or other similar charges); B = sum on account of carriage of passengers, livestock, mail or goods shipped at any port outside India, whether received or deemed to be received in India, by the assessee or any other person on his behalf (including demurrage, handling or other similar charges).
2.	Business of operation of cruise ships (subject to the conditions as may be prescribed).	Non-resident.	20% of (A+B), where,— A = sum on account of carriage of passengers, paid or payable to the assessee or any other person on his behalf; B = sum on account of carriage of passengers received or deemed to be received by the assessee or any other person on his behalf.
3.	Business of operation of aircraft.	Non-resident.	5% of (A+B), where,— A = sum on account of carriage of passengers, livestock, mail or goods from any place in India, paid or payable (in or outside India) to the assessee or any other person on his behalf; B = sum on account of carriage of passengers, livestock, mail or goods from any place outside India, received or deemed to be received in India, by the assessee or any other person on his behalf.
4.	Business of civil construction or erection or testing or commissioning, of plant or machinery, in connection with a turnkey power project, approved by the Central Government.	Foreign company.	10% of the amount towards such civil construction, erection, testing, or commissioning, paid or payable, to the assessee or to any other person on his behalf, whether in or outside India.
5.	Business of providing services or facilities (including supply of plant and machinery on hire) for prospecting, extraction or production of mineral oils.	Non-resident.	10% of (A+B), where,— A = sum on account of business of providing services and facilities in connection with, or supply of plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of mineral oils in India, paid or payable (in or outside India), to the assessee or any other person on his behalf; B = sum on account of business of providing services and facilities in connection with, or supply of plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of mineral oils outside India, received or deemed to be received in India, by the assessee or any other person on his behalf.
6.	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 to a resident company.	Non-resident.	25% of (A + B), where,— 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; 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.

(3) For the purposes of sub-section (2) (Table: Sl. Nos. 4 and 5) the specified assessee may claim that the profits actually earned from the specified business are lower than the business profits computed under sub-section (2), if,—

(a) he keeps and maintains such books of account and other documents as required under section 62; and

(b) gets his accounts audited and furnish a report of such audit as required under section 63.

(4) Any loss, allowance or deduction allowable under the provisions of this Act shall not be allowed against the income computed in the manner specified in sub-section (2).

(5) The written down value of any asset used for the purposes of specified business or profession shall be computed, as if the assessee mentioned in column C of the Table in sub-section (2) had claimed and was actually allowed depreciation thereon for each of the relevant tax years.

(6) For the purposes of sub-section (2) (Table: Sl. No. 5) the provisions of this sec- tion shall not apply where the provisions of section 54 or 59 or 207 or 527 apply for the purposes of computing profits and gains or any other income referred to in the said sections.

(7) For the purposes of sub-section (2) (Table: Sl. No. 5), “plant” includes ships, aircrafts, vehicles, drilling units, scientific apparatuses and equipments used for the purposes of the specified business.

(8) For the purposes of sub-section (2) (Table: Sl. No. 6), resident company shall satisfy the following:—

(a) it is establishing or operating electronics manufacturing facility or a con- nected 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) it satisfies the conditions as may be prescribed in this behalf.

(9) The provisions of sections 59 and 207 shall not apply to amounts referred to in sub-section (2) (Table: Sl. No. 6).

Corresponding provision — 1961 regime

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
INCOME-TAX ACT, 2025 — s. 61	INCOME-TAX ACT, 1961
Sl. No. 1 — NR shipping non-cruise (7.5% of A+B)	1961 s. 44B
Sl. No. 2 — NR cruise ships (20% of A+B; conditions as prescribed)	Newer — FA 2024 onwards (no direct 1961 equivalent)
Sl. No. 3 — NR operation of aircraft (5% of A+B)	1961 s. 44BBA
Sl. No. 4 — Foreign company in civil construction / turnkey power (10%)	1961 s. 44BBB
Sl. No. 5 — NR mineral-oil services (10% of A+B)	1961 s. 44BB
Sl. No. 6 — NR services / technology to resident electronics-mfg co (25% of A+B)	Newer regime — FA 2024 / FA 2025 onwards
Books / audit relief & lower-profit option (sub-s. 3) for Sl. Nos. 4 and 5 only	1961 ss. 44AA / 44AB / 44BB(2) carve-outs

STATUTORY ARCHITECTURE

Sub-section (1) — non-obstante override of ss. 26-54. Sub-section (2) Table — six categories of NR presumptive taxation. Sub-section (3) — assessee may opt out of presumptive (claim lower-actual profits) for Sl. Nos. 4 and 5 ONLY — IF books u/s 62 maintained AND audit u/s 63 conducted. Sl. Nos. 1, 2, 3 and 6 are HARD presumptive — no lower-profit-claim available. Sub-section (4) — no further loss / allowance / deduction allowed against income computed presumptively. Sub-section (5) — depreciation deemed allowed for WDV-tracking purposes (relevant if assessee later exits presumptive). Sub-section (6) — Sl. No. 5 (NR mineral-oil services) does NOT apply where s. 54 (PSC mineral-oil regime) / s. 59 (royalty/FTS) / s. 207 / s. 527 already applies — i.e., presumptive is fallback, not stacked. Sub-section (7) — for Sl. No. 5, 'plant' includes ships, aircrafts, vehicles, drilling units, scientific apparatuses and equipments. Sub-section (8) — Sl. No. 6 conditions on resident company: (a) MeitY-notified scheme for electronics-mfg facility; (b) prescribed conditions. Sub-section (9) — ss. 59 (royalty/FTS) and 207 (NR rates) do NOT apply to Sl. No. 6 amounts.

Sl. NO. 2 — CRUISE SHIPS (NEW REGIME)

The cruise-ship category is a recent addition to the NR presumptive landscape (post-FA 2024). It separates cruise-ship operation from general shipping (Sl. No. 1) — recognising the higher margins typical of cruise tourism. Rate: 20% of (A+B) where A = passenger-carriage receipts paid/payable; B = passenger-carriage receipts received/deemed-received in India. Subject to 'conditions as may be prescribed' — Income-tax Rules, 2026 will likely prescribe operational test (e.g., sailing within India waters, port-calls, etc.).

Sl. NO. 6 — ELECTRONICS MANUFACTURING SERVICES (NEW REGIME)

Sl. No. 6 is the PLI / Make-in-India incentive for electronics manufacturing — caters to NR providers of services / technology to a resident company that is establishing / operating an electronics-manufacturing facility (notified by MeitY). Rate: 25% of (A+B) where: A = amount paid / payable to the NR for services / technology; B = amount received / deemed-received by the NR for services / technology. Effectively, NR's deemed Indian PGBP income = 25% × (A + B). Sub-section (8) — additional eligibility conditions on the resident-company side. Sub-section (9) — ss. 59 / 207 carve-out: NR's receipts in this category are NOT taxed under royalty/FTS or general gross-rate provisions — s. 61 Sl. No. 6 is the EXCLUSIVE charging mechanism.

CASE LAW

ONGC v. CIT (SC) — 1961 s. 44BB embraces all reimbursements for oil-services; mob-and-demob amounts included in 'amounts paid'. Applies mutatis mutandis to s. 61 Sl. No. 5. B.J. Services Co. ME Ltd v. ACIT (Uttarakhand HC) — 1961 s. 44BB and DTAA can co-exist; treaty Article 7(3) PE-attribution may prevail where favourable. Sedco Forex International Inc v. CIT (SC) — payments outside India for India operations form part of receipts under 1961 s. 44BB; broad-base reading endorsed.

PLANNING NOTES

(i) For NR shipping clients (Mediterranean Shipping, Maersk, COSCO India branches), evaluate s. 61 Sl. No. 1 vs. tonnage-tax regime u/s 116. (ii) For NR cruise-ship operators, await Income-tax-Rule prescriptions — 20% rate is materially higher than general shipping 7.5%; document classification carefully. (iii) For NR oilfield-services (Halliburton, Schlumberger, Baker Hughes), s. 61 Sl. No. 5 — 10% deemed profit. Lower-profit-claim available with books-and-audit. Evaluate vs. PE-attribution net-basis. (iv) For NR EPC-turnkey providers (foreign engineering contractors), s. 61 Sl. No. 4 — 10% of amount; lower-profit claim available; foreign-company-only. (v) For NR providing services / technology under PLI to electronics-mfg residents (Sl. No. 6) — 25% of (A+B); HARD presumptive; verify CG/MeitY-notification of the resident-company scheme; document A and B separately. (vi) Treaty interplay — Article 7 / 8 / 12 of applicable DTAA may override; flag where treaty-rate < presumptive-rate.

CROSS-REFERENCES

Section 54 — Mineral-oil PSC regime.
Section 59 — Royalty / FTS for NRs (carved out for Sl. No. 6).
Section 62 / 63 — Books / audit (lower-profit option for Sl. Nos. 4 and 5).
Section 116 — Tonnage tax for shipping (alternative to s. 61 Sl. Nos. 1 / 2).
Section 207 / 527 — NR gross-basis tax rates (carved out for Sl. No. 6).
Article 7 / 8 / 12 of applicable DTAA.
MeitY scheme notification — for Sl. No. 6 eligibility.

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