The Income-tax (First Amendment) Rules, 2025 amends the Income-tax Rules, 1962, by adding a new rule (6GB) that outlines the conditions under which non-resident operators of cruise ships can compute profits and gains for the purposes of Section 44BBC of the Income-tax Act, 1961.

Understanding Section 44BBC:

Section 44BBC allows non-residents operating cruise ships to compute their income using a presumptive taxation scheme. Under this, 20% of the total income from carrying passengers (both paid and payable amounts) is considered as taxable profits subject to specified conditions.

Insertion of Rule 6GB: Conditions for non-resident, engaged in the business of operation of cruise ships for section 44BBC

• The new rule applies to non-residents engaged in the business of operating cruise ships in India. It specifies that the ship must meet the following criteria:
  • The ship must carry more than 200 passengers or be at least 75 meters long.
  • It must operate on scheduled voyages or shore excursions, visiting at least two sea ports in India or the same sea ports twice.
  • The ship must be primarily used for carrying passengers and not cargo.
  • It must comply with guidelines issued by the Ministry of Tourism or Ministry of Shipping.

This amendment provides clarity on the specific conditions for non-resident cruise ship operators to be eligible for the provisions under Section 44BBC of the Income-tax Act, 1961. It aims to ensure that cruise operations contribute to the economy by specifying the required standards for such businesses.

This notification is effective from the date of Publication in official gazette i.e. 21st January 2025