Presumptive Taxation for Non-Residents in India: Clause 61 of the Income Tax Bill, 2025 merging Sections 44B, 44BB, 44BBA, 44BBB, 44BBC and 44BBD of Income Tax Act, 1961

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..... al provision for computation of income on presumptive basis in respect of certain business activities of certain non-residents. Income Tax Bill, 2025 Introduction Clause 61 of the Income Tax Bill, 2025, introduces a special provision for computing income on a presumptive basis for certain business activities conducted by non-residents. This clause is significant as it aims to simplify the taxat .....

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..... ccounts and undergoing audits. This approach aligns with global best practices, where presumptive taxation is used to facilitate ease of doing business, particularly for non-resident entities. Detailed Analysis Key Clauses and Interpretations 1. **Scope and Applicability**: Clause 61 applies to non-residents engaged in specified business activities such as the operation of ships, cruise ships, .....

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..... flect actual economic conditions. 4. **Restrictions on Deductions and Set-offs**: The clause restricts the allowance of losses, deductions, or depreciation against the presumptive income, ensuring simplicity and consistency in tax calculations. Comparative Analysis with Existing Sections Section Business Activity Presumptive Rate Comparison with Clause 61 44B Operation of ships (exc .....

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..... g 25% Sr. no. 6 of the Table in Clause 61(2) introduces a similar provision for electronics, emphasizing technology services. Practical Implications Clause 61 has significant implications for non-resident businesses and the Indian economy. By simplifying tax compliance, it reduces the administrative burden on non-residents, potentially increasing foreign investment in the specified sectors. .....

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