Special provision for computing profits and gains of the business of operation of aircraft in the case of non-residents [Section 44BBA] :
Under section 44BBA(1), a sum equal to 5% of the aggregate of the amounts specified in subsection (2) is deemed to be the profits and gains chargeable to tax under the head “Profits and gains of business or profession”. Sub-section (2) specifies the following amounts –
(a) the amount paid or payable, whether in or out of India, to the assessee or to any person on his behalf on account of the carriage of passengers, livestock, mail or goods from any place in India; and
(b) the amount received or deemed to be received in India by or on behalf of the assessee on account of the carriage of passengers, livestock, mail or goods from any place outside India.
Illustration
Mr. Tiwari, a non-resident, operates an aircraft between Bangkok and Mumbai. He received the following amounts in the course of the business of operat ion of aircraft during the year ending 31.3.2016:
(i) Rs 3 crore in India on account of carriage of passengers from Mumbai.
(ii) Rs 2 crore in India on account of carriage of goods from Mumbai.
(iii) Rs 1 crore in India on account of carriage of passengers from Bangkok.
(iv) Rs 2 crore in Bangkok on account of carriage of passengers from Mumbai.
The total expenditure incurred by Mr. Tiwari for the purposes of the business during the year ending 31.3.2016 was Rs 1.8 crore.
Compute the income of Mr. Tiwari chargeable to tax in India under the head “Profits and gains of business or profession” for the assessment year 2016-17.
Solution
Keeping in view the provisions of section 44BBA, the income of Mr. Tiwari chargeable to tax in India under the head “Profits and gains of business or profession” is worked out hereunder –
| Rs | |
| Amount received in India on account of carriage of passengers from Mumbai | 3,00,00,000 |
| Amount received in India on account of carriage of goods from Mumbai | 2,00,00,000 |
| Amount received in India on account of carriage of passengers from Bangkok | 1,00,00,000 |
| Amount received in Bangkok on account of carriage of passengers from Mumbai | 2,00,00,000 |
| 8,00,00,000 |
Income from business under section 44BBA at 5% of Rs 8,00,00,000 is Rs 40,00,000, which is the income of Mr. Tiwari chargeable to tax in India under the head “Profits and gains of business or profession” for the A.Y.2016-17.