Section 225 of the Income-tax Act, 2025

Section 225 — Income from business of operating qualifying ships. Successor to s.115VA of the 1961 Act.

Where this section sits

Section 225 is in Chapter XIII — Determination of Tax in Special Cases, which runs from section 190 to section 235.

What this section does

A single provision with two limbs. Overriding sections 26 to 54 except sections 50 and 53, it provides that in the case of a company the income from the business of operating qualifying ships may, at the company's option, be computed as per the provisions of this Part, and that such income is deemed to be the profits and gains of that business chargeable under the head "Profits and gains of business or profession".

The section is the doorway to the Part. It confers the option and fixes the head under which the resulting figure is charged; the conditions, the computation and the consequences of the option are in the other sections of the Part.

Why it is there

Shipping income is computed on a tonnage basis rather than by ordinary business accounting, so the ordinary computation provisions have to be displaced first. This section does that displacement, preserves sections 50 and 53 from it, and makes clear the tonnage figure is still business income and not a separate head.

Who it applies to

A company carrying on the business of operating qualifying ships
A company choosing not to exercise the option, which continues under sections 26 to 54

What this means in practice

The computation is optional, not automatic — the words are "may, at its option" — so a company operating qualifying ships is computed under sections 26 to 54 unless it opts in. Two of the displaced sections survive: sections 50 and 53 continue to apply, being expressly excepted from the override. And because clause (b) deems the result to be profits and gains of business or profession, the rest of the Act's machinery for that head applies to the tonnage figure. The option is available only to a company; the section confers it on no other person.

Where you meet this section

You meet it as the opening provision cited whenever a shipping company's income is computed on the tonnage basis — in the return where the option is reflected, and in any order deciding whether the company was entitled to compute under this Part at all.

The words themselves

may, at its option, be computed as per provisions of this Part

Section 225(a), Income-tax Act, 2025.

Irrespective of anything contained in sections 26 to 54 (except 50 and 53), in the case of a company, the income from the business of operating qualifying ships

Section 225, Income-tax Act, 2025.

What people get wrong

Reading the tonnage computation as compulsory for a shipping company. Clause (a) makes it an option.
Assuming all of sections 26 to 54 are displaced. Sections 50 and 53 are expressly excepted from the override.
Treating the tonnage figure as income of some other head. Clause (b) deems it to be profits and gains of the business chargeable under "Profits and gains of business or profession".
Applying the section to a person other than a company. It operates only "in the case of a company".

What this replaced

The correspondence is the Income Tax Department’s own, from its comparison utility for the 1961 and 2025 Acts. A renumbering is the easy half; whether the words changed is the half that decides cases.

115VA - Computation of profits and gains from the business of operating qualifying ships

See the full 1961 to 2025 concordance.

Read with

Section 26
Section 50
Section 53
Section 54

What this page does not tell you. It does not reproduce the section. Everything above was written from the section’s own text as the Income Tax Department publishes it — the text is here, and nothing here is advice on your facts. Where a figure matters, read the sub-section it comes from.