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Introduction:

The Income Tax Act of 1961 provides a specialized presumptive taxation scheme for non-residents through Sections 44B, 44BB, 44BBA, and 44BBB. This framework is designed to simplify tax obligations for non-resident entities engaged in specific business activities within India. By opting for presumptive taxation, non-residents can benefit from a straightforward calculation of their taxable income based on a percentage of their gross receipts or specified sums, bypassing the need for detailed bookkeeping and audits.

What is Section 44B?

Section 44B deals with Taxation of Shipping Business of Non Resident ( Foreign Individual and Foreign Company). If NR choose to pay taxes under this section, their presumptive income would be 7.5% of Specified sum.

Now what is specified sum in Section 44B?

Specified sum means:

  • Amount paid or payable on account of carriage of passengers, livestock, mail or goods shipped at or from any part or place in India, and
  • Amount received or deemed to be received in India on account of carriage of passengers, livestock, mail or goods shipped at or from any part or place in India.

Can Assessee declare lower Income Section 44B?

No, Assessee has no option to declare lower income than the specified sum.

Can Assessee Set off Brought Forward Losses under 44B?

Yes, Assessee can set off their brought forward losses and unabsorbed depreciation.

What is Section 44BB?

Section 44BB deals with Taxation of business of providing services or facilities in connection with, or supplying plant and machinery on hire used, or to be used, in prospecting for, or extraction or production of Mineral oils by Non Resident ( Foreign Individual and Foreign Company). If NR choose to pay taxes under this section, their presumptive income would be 10% of Specified sum.

Now what is specified sum in Section 44BB?

Specified sum means:

  • Amount paid or payable on account of the provision of such services or facilities for the aforesaid purposes in India, and
  • Amount received or deemed to be received in India on account of the provision of such services or facilities for the aforesaid purposes outside India.

Can Assessee declare lower Income Section 44BB?

Yes, Assessee has the option to declare lower income provided the assessee maintains Books of accounts u/s 44AA and gets the book audited u/s 44AB.

Can Assessee Set off Brought Forward Losses under 44BB?

No, If assessee declares income as per this section, set off of brought forward losses and unabsorbed depreciation shall not be allowed (Amended).

What is Section 44BBA?

Section 44BBA deals with Taxation of Operation of Aircraft of Non Resident ( Foreign Individual and Foreign Company). If NR choose to pay taxes under this section, their presumptive income would be 5% of Specified sum.

Now what is specified sum in Section 44BBA?

Specified sum means:

  • Amount paid or payable on account of carriage of passengers, livestock, mail or goods shipped at or from any part or place in India, and
  • Amount received or deemed to be received in India on account of carriage of passengers, livestock, mail or goods shipped at or from any part or place in India.

Can Assessee declare lower Income Section 44BBA?

No, Assessee has no option to declare lower income than the specified sum.

Can Assessee Set off Brought Forward Losses under 44BBA?

Yes, Assessee can set off their brought forward losses and unabsorbed depreciation.

What is Section 44BBB?

Section 44BBB deals with Taxation of Only Foreign Companies ( No Foreign Individuals) engaged in the business of Civil Construction or the business of Erection of Plant and Machinery or testing or commissioning, in connection with Turnkey power projects approved by the Central Government. If NR choose to pay taxes under this section, their presumptive income would be 10% of Specified sum.

Now what is specified sum in Section 44BBB?

Specified sum means:

  • Amount paid or payable on account of such Civil construction, erection, testing or commissioning.

Can Assessee declare lower Income Section 44BBB?

Yes, Assessee has the option to declare lower income provided the assessee maintains Books of accounts u/s 44AA and gets the book audited u/s 44AB.

Can Assessee Set off Brought Forward Losses under 44BBB?

No, If assessee declares income as per this section, set off of brought forward losses and unabsorbed depreciation shall not be allowed (Amended).

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Disclaimer: This article is solely for educational purpose and cannot be construed as legal and professional opinion. It is based on the interpretation of the author and are not binding on any tax authority. Author is not responsible for any loss occurred to any person acting or refraining from acting as a result of any material in this article.

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