Summary of Section 44B of Income Tax Act, 1961 with amendments

Wef AY 1976-77

Section 44B of the Act with summary

An Assessee is NRI and is engaged in shipping business .

44B. (1) Notwithstanding anything to the contrary contained in Section 28 to 43A, in the case of an assessee, being a non-resident, engaged in the business of operation of ships, a sum equal to seven and a half 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”.

An assessee  being a Non Resident , who is engaged in the business of operation of ships,  a sum equal to seven and a half percent of the aggregate of the amounts specified in sub section (2) of this section shall be deemed to be the profit 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 :—

(i) the amount paid or payable (whether in or out of India) to the assessee or to any person on his behalf on account of the carriage of passengers, livestock, mail or goods shipped at any port in India; and

(ii) the amount received or deemed to be received in India by or on behalf of the assessee on account of the carriage of passengers, livestock, mail or goods shipped at any port outside India.

The amounts referred to in sub section (1 ) shall be as under

(1) The amount paid or payable whether in or out of India to the assessee or to any person on his behalf on account of the carriage of the passengers , livestock , mail or goods shipped at any point in India

(2) The amount received or deemed to be received in India by or on behalf of the assessee on account of carriage of passengers , livestock mail or goods shipped at any port out side India

Explanation.—For the purposes of this sub-section, the amount referred to in clause (i) or clause (ii) shall include the amount paid or payable or received or deemed to be received, as the case may be, by way of demurrage charges or handling charges or any other amount of similar nature.

The amount paid or payable ,  received  or deemed to be received shall include demurrage charges or  handling charges or any other amount of similar nature .

Summary of section 44B of the Act

1. The assessee is an NRI who is engaged in the business of operation of ships , a sum equal to seven and half percent of the aggregate of the amount specified in sub section (2) of this section shall be chargeable to tax under the head profit and gains of business or profession .

2. The amount refereed in section (1) shall be the amount paid or payable in India or out of India on account of carriage of passengers , livestock , mail or goods shipped at any port in India

3. The amount received in India or deemed to be received in India for the shipping at any port outside India.

4. The amount referred in clause (1) and (2) shall include demurrage charges or handling charges or any other amount of similar nature .

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Disclaimer: The author is not responsible for any damages if caused due to mistake or not following the provisions strictly in the proceedings with any authority or court . This is just academic in nature and purpose . Author has tried to brief and explain the confusion for audit of books among some professionals .