Section 115VD of Income Tax Act "Qualifying ship"
115VD. For the purposes of this Chapter, a ship is a
qualifying ship if-
(a) it is a sea going ship or vessel of fifteen net tonnage
or more;
(b) it is a ship registered under the Merchant Shipping Act,
1958 (44 of 1958), or a ship registered outside India in
respect of which a licence has been issued by the
Director-General of Shipping under section 406 or section
407 of the Merchant Shipping Act, 1958 (44 of 1958); and
(c) a valid certificate in respect of such ship indicating
its net tonnage is in force,
but does not include-
(i) a sea going ship or vessel if the main purpose for which
it is used is the provision of goods or services of a kind
normally provided on land;
(ii) fishing vessels;
(iii) factory ships;
(iv) pleasure crafts;
(v) harbour and river ferries;
(vi) offshore installations;
(vii) [***]
(viii) a qualifying ship which is used as a fishing vessel
for a period of more than thirty days during a previous
year.
115VE. (1) A tonnage tax company engaged in the business
of operating qualifying ships shall compute the profits from
such business under the tonnage tax scheme.
(2) The business of operating qualifying ships giving rise
to income referred to in sub-section (1) of section 115V-I
shall be considered as a separate business (hereafter in
this Chapter referred to as the tonnage tax business)
distinct from all other activities or business carried on by
the company.
(3) The profits referred to in sub-section (1) shall be
computed separately from the profits and gains from any
other business.
(4) The tonnage tax scheme shall apply only if an option to
that effect is made in accordance with the provisions of
section 115VP.
(5) Where a company engaged in the business of operating
qualifying ships is not covered under the tonnage tax scheme
or, has not made an option to that effect, as the case may
be, the profits and gains of such company from such business
shall be computed in accordance with the other provisions of
this Act.