Section 61 explained: this guide covers what Section 61 means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
1. Specialized Presumptive Sections for Non-Residents
Beyond the widely-used section 58 (old 44AD and 44ADA), ITA 2025 has several specialized presumptive taxation provisions for non-resident taxpayers in specific industries. These sections fix a deemed profit percentage of gross amounts received in India — removing the need for detailed expense tracking.
2. Section 61 (Table Sl. No. 1): Shipping Business (Non-Resident)
For non-resident shipping companies carrying passengers or goods from Indian ports:
- Deemed income = 7.5% of the total amount received or receivable (whether in or out of India) for such carriage
- Includes: freight charges, demurrage, and any other amount
- Tax at 40% (foreign company rate) on this 7.5% deemed income
- Effective tax = 40% × 7.5% = 3% of gross shipping revenue from Indian ports
- Indian shipping companies may opt for the tonnage tax scheme (sections 225 to 235)
3. Section 61 (Table Sl. No. 5): Oil Exploration (Non-Resident)
For non-resident companies engaged in the business of providing services or facilities in connection with oil and gas exploration and production in India:
- Deemed income = 10% of the aggregate amounts paid/payable to the non-resident
- Covers: drilling services, geophysical surveys, seismic data acquisition, consultancy for oil exploration
- Tax at 40% on 10% deemed income = effective 4% of gross receipts
- Can opt out: if actual income is lower than 10%, maintain books and pay tax on actual
4. Section 61 (Table Sl. No. 3): Aircraft (Non-Resident)
For non-resident airlines operating aircraft in India:
- Deemed income = 5% of the total amount received/receivable for carriage of passengers, livestock, mail, or goods from India
- Effective tax = 40% × 5% = 2% of gross aviation receipts from India
- Applicable for international airlines operating to/from Indian airports
5. Section 61 (Table Sl. No. 4): Civil Construction (Non-Resident)
For non-resident companies engaged in construction, assembly, or installation projects or surveys in India under a turnkey contract:
- Deemed income = 10% of the total amount paid/payable
- Effective tax = 40% × 10% = 4% of contract value
- Covers: infrastructure construction, EPC (Engineering Procurement Construction) contracts by foreign companies
6. Opting Out of Specialized Presumptive Sections
Under section 61(3), a non-resident covered by Table Sl. No. 5 (oil services) or Table Sl. No. 4 (civil construction) can claim that the profits actually earned are lower than the presumptive profit. This requires keeping books of account under section 62 and getting the accounts audited and an audit report furnished under section 63. Shipping (Table Sl. No. 1) and aircraft (Table Sl. No. 3) carry no such option in section 61(3). The default is presumptive; opting out is the exception.
7. Why TaxClue
Non-resident companies in shipping, oil, aviation, and construction have specific presumptive provisions that are often more efficient than normal tax. TaxClue advises on these provisions and files returns. Contact us under ITA 2025.