Rule 44 — Conditions to be fulfilled by a non-resident, engaged in the business of operation of cruise ships under section 61(2) [Table: Sl. No. 2]. Made under s.61 of the Income-tax Act, 2025.
Rule 44 gives effect to Section 61 of the Income-tax Act, 2025. A rule cannot go beyond the section it serves: where the two seem to differ, the section governs.
The rule states the conditions a non-resident assessee engaged in the business of operation of cruise ships must fulfil for the purposes of section 61(2) [Table: Sl. No. 2].
Under clause (a), the assessee shall operate a passenger ship having a carrying capacity of more than two hundred passengers or a length of seventy-five meters or more, for leisure and recreational purposes, and having appropriate dining and cabin facilities for passengers. Under clause (b), the ship shall be operated on scheduled voyage or shore excursion touching at least two sea ports of India, or the same sea ports of India twice. Under clause (c), the ship shall be operated primarily for carrying passengers and not for carrying cargo. Under clause (d), it shall be operated as per the procedure and guidelines, if any, issued by the Ministry of Tourism or the Ministry of Ports, Shipping and Waterways.
Section 61(2) [Table: Sl. No. 2] provides for a non-resident cruise ship operator, but the Act does not say what makes a ship a cruise ship rather than a ferry, a cargo vessel or a private yacht. The rule draws that line with physical and operational tests that can be checked from the ship's own particulars and its itinerary — size or capacity, leisure purpose, dining and cabin facilities, Indian port calls, and a passenger rather than cargo business.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Carrying capacity of the passenger ship | More than two hundred passengers | Alternative to the length test; either limb satisfies clause (a) | Clause (a) |
| Length of the passenger ship | Seventy-five meters or more | Alternative to the carrying capacity test; either limb satisfies clause (a) | Clause (a) |
| Indian sea ports to be touched | At least two sea ports of India, or the same sea ports of India twice | On a scheduled voyage or shore excursion | Clause (b) |
The two figures in clause (a) are alternatives joined by "or", so a ship of seventy-five meters or more qualifies on size even if it carries two hundred passengers or fewer, and a ship carrying more than two hundred passengers qualifies even if it is shorter. The rest of clause (a) is not alternative: the ship must be operated for leisure and recreational purposes and must have appropriate dining and cabin facilities for passengers. Clause (b) is satisfied either by touching two different Indian sea ports or by touching the same Indian sea ports twice, so a round trip returning to its port of departure can qualify. Clause (c) does not forbid cargo outright — the test is that the ship is operated primarily for carrying passengers and not for carrying cargo. Clause (d) is conditional in its own terms, applying to the procedure and guidelines "if any" issued by the Ministry of Tourism or the Ministry of Ports, Shipping and Waterways, so what it requires depends on what those Ministries have issued rather than on anything in this rule. All four conditions must be met; the rule sets them, while the tax consequence is section 61(2)'s.
A non-resident operator runs a 68-metre vessel with cabins and dining rooms, carrying up to 240 passengers on leisure sailings that leave Mumbai, call at Goa and return to Mumbai. Clause (a) is satisfied on carrying capacity even though the ship is under seventy-five meters, and clause (b) is satisfied because two Indian sea ports are touched. If the same vessel were reconfigured to carry 150 passengers and a substantial deck cargo, it would fail clause (a) on both limbs and clause (c) as well.
A non-resident operator meets it when claiming the benefit of section 61(2) [Table: Sl. No. 2] in its return and in any assessment of that claim, where the ship's particulars and voyage schedule are what has to be shown.
operate a passenger ship having a carrying capacity of more than two hundred passengers or length of seventy-five meters or more, for leisure and recreational purposes and having appropriate dining and cabin facilities for passengers
operate such ship on scheduled voyage or shore excursion touching at least two sea ports of India or same sea ports of India twice