Amendment of the Income-tax Rules under section 115VG of the Income-tax Act, 1961
Notification No. 120 was published on 29 March 2005. Its subject is Amendment of the Income-tax Rules under section 115VG of the Income-tax Act, 1961.
This amends the Income-tax Rules. What it changes is the Rules, not the Act — and a rule can never take away what the section gives.
In exercise of the powers under section 295 of the Income-tax Act, 1961, the Central Board of Direct Taxes makes the Income-tax (Eighth Amendment) Rules, 2005, inserting rules 11Q, 11R, 11S and 11T after rule 11P in sub-part G of Part II of the Income-tax Rules, 1962, and inserting Form No. 66 in Appendix II. Rule 11Q computes deemed tonnage for the Explanation to sub-section (4) of section 115VG: for purchase of slots and slot charter, 2.5 TEU equals 1 net tonnage, and for sharing of a break-bulk vessel, 19 cubic metres equals 1 net tonnage where cargo is restricted by volume and 14 metric tons equals 1 net tonnage where it is restricted by weight. Rule 11R lists the incidental activities for sub-section (5) of section 115VI as maritime consultancy charges, income from loading or unloading of cargo, ship management fees or remuneration for managed vessels, and maritime education or recruitment fees. Rule 11S provides that the limit for charter-in of tonnage under section 115VV is computed by dividing the total chartered-in ton days by the total ton days operated by the company. Rule 11T prescribes that the accountant's report under clause (ii) of section 115VW shall be in Form No. 66.
NOTIFICATION NO. 120/2005, DATED 29-3-2005
In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:—
1. (1) These rules may be called the Income-tax (Eighth Amendment) Rules, 2005.
(2) They shall come into force on the 1st day of April, 2005.
2. In the Income-tax Rules, 1962—
(a) in Part II, in sub-part G, after rule 11P, the following rules shall be inserted, namely:—
11Q. Computation of deemed tonnage - (1) For the purpose of the Explanation to sub-section (4) of section 115VG, deemed tonnage in respect of an arrangement of purchase of slots and slot charter shall be computed (illustrative formula given in Note 3 appearing after the corresponding Form No. 66) on the following basis :
2.5 TEU = 1 Net Tonnage (1 NT)
where TEU is Twenty foot Equivalent Unit (Container of this size)
(2) Computation of deemed tonnage (illustrative formula given in Note 4 appearing after the corresponding Form No. 66) in respect of an arrangement of sharing of break-bulk vessel shall be made on the following basis :
(i) in case where cargo is restricted by volume :
19 cubic meter (cbm) = 1 net tonnage (1 NT); and
(ii) in case where Cargo is restricted by weight
14 metric tons = 1 net tonnage (1 NT)
11R. Incidental activities for purposes of relevant shipping income - The incidental activities (details given in Note 5 appearing after the corresponding Form No. 66) referred to in sub-section (5) of section 115VI shall be the following, namely :—
(i) maritime consultancy charges;
(ii) income from loading or unloading of cargo;
(iii) ship management fees or remuneration received for managed vessels; and
(iv) maritime education or recruitment fees.
11S. Computation of average of net tonnage for charter-in of tonnage - The limit for charter-in of tonnage of the qualifying ships referred to in section 115VV (to be worked out according to the illustration explained in Note 6 appearing after the corresponding Form No. 66) during any previous year shall be computed by dividing the total number of chartered-in ton days by the total number of ton days operated by the company.
11T. Form of report of an accountant under clause (ii) of section 115VW - The report of audit of accounts of a qualified company which is required to be furnished under clause (ii) of section 115VW shall be in Form No. 66.
(b) in Appendix II upto Form No. 65, the following form shall be inserted, namely :—FORM NO. 66
[F. No. 142/31/2004-TPL]
| Rule of the 1962 Rules | Now, in the 2026 Rules |
|---|---|
| Rule 11P | rule 146 |
| Rule 11Q | rule 146 |
| Rule 11R | rule 146 |
| Rule 11S | rule 146 |
| Rule 11T | rule 146 |
Forms it touches. Form No. 66
1 April 2005.
In the tonnage tax computation filed with the return of income, in the accountant's report in Form No. 66, and in an assessment testing whether the charter-in limit was exceeded.
A company that purchases slots equivalent to 2,500 TEU converts them at 2.5 TEU to 1 net tonnage, giving deemed tonnage of 1,000 net tonnage; on a break-bulk sharing arrangement restricted by weight, 14,000 metric tons converts at 14 metric tons to 1 net tonnage, giving 1,000 net tonnage.
Forms it names. Form No. 65, Form No. 66
Rules it names. Rule 11P of the Income-tax Rules, 1962. The 1962 Rules were replaced by the Income-tax Rules, 2026, which renumbered nearly everything: a rule number quoted here almost never means the same rule today.
Source: the Income Tax Department’s own published text — its page for this instrument.