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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Tax Planning and Nature of Business

Ganga Shipping Ltd wants to opt for the tonnage tax scheme. Which feature must it satisfy to be a qualifying company under section 235 of the Income-tax Act, 2025?

To be a qualifying company, it must be an Indian company with its place of effective management in India, own at least one qualifying ship, and have operating ships as its main object. Fishing vessels and harbour or river ferries do not count as qualifying ships.

  1. AIt must be a foreign company with its board outside India
  2. BIt must own at least one qualifying ship and be an Indian company whose place of effective management is in IndiaCorrect
  3. CIt must own only fishing vessels
  4. DIt must be engaged mainly in running harbour ferries

Explanation

A qualifying company must be an Indian company, have its place of effective management in India, own at least one qualifying ship, and have operating ships as its main object. Fishing vessels and harbour and river ferries are excluded from qualifying ships, so those options fail.

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