Domestic shipping companies stand to gain from the expansion of tonnage tax scheme proposed in the new Income Tax Bill, 2025. The relaxation has been extended under special provisions relating to income of shipping companies.
Industry experts said the bill, once approved, would help improve cash flow and viability of both inland and coastal shipping operations. The tonnage tax business will be considered a separate business, distinct from all other activities or business carried on by a company, as per the bill. There will be a 10-year lock-in for the companies opting for the tonnage tax scheme, allowing them an exemption from corporate tax during the applicable period.
The bill proposes to extend the tonnage tax regime to the Indian inland vessels registered under the Inland Vessels Act 2021. Earlier, this regime was restricted to the Indian ships registered under the Merchant Shipping Act, 1958.
