The finance ministry on Wednesday expanded the scope of the Tonnage Tax Scheme (TTS) to include inland vessels, ahead of the 2026 Union Budget.
The amendment, effective from April 1 this year (from AY 2026-27—or FY 2025-26—onwards), is in line with the finance ministry's promises for the maritime sector in the 2025 Union Budget.
The TTS amendment was made by modifying the Income Tax Act 1961 via the Finance Act 2025.
"This reform brings tax certainty and policy support to operators, reinforcing the government’s commitment to sustainable and efficient multimodal logistics," the Ministry of Ports, Shipping and Waterways (MoPSW) said in an X post.
The Government has expanded the Tonnage Tax Scheme to include inland vessels, strengthening India’s inland waterways ecosystem. Earlier applicable only to seagoing ships, the scheme will now also benefit inland vessels registered under the Inland Vessels Act, 2021, encouraging… pic.twitter.com/WjTRkRjZTM
— Ministry of Ports, Shipping and Waterways (@shipmin_india) January 22, 2026
According to the Directorate General of Shipping, TTS is defined as a presumptive taxation method that enables shipping companies to choose to be taxed based on the net tonnage of their vessels, instead of their actual variable business profits or losses.
This scheme, included in the Finance Bill of 2004, was so far applicable only to seagoing ships.
The expansion of the scope of the TTS to include vessels registered under the Inland Vessels Act 2021 is expected to boost inland water transport, and in turn contribute to India's blue economy.
This also comes ahead of the third meeting of the Inland Waterways Development Council (IWDC) at Kochi, Kerala, on Friday.
Inland Waterways Development Council 3.0 meet on Jan 23 might see major announcements about infrastructure along national waterways. #IWDC
— THE WEEK (@TheWeekLive) January 21, 2026
By @NirmalJovialz @IWAI_ShipMin @shipmin_india https://t.co/67DmatlTqh
The IWDC is a high-level body established to discuss policy decisions affecting the growth and maintenance of India's inland waterways ecosystem.
The agenda for the day-long meeting chaired by Union Minister for MoPSW, Sarbananda Sonowal, includes sessions on building a resilient urban water transport system, enhancing the efficiency of cargo transport, promoting green vessels for passenger transport, advancing river cruise tourism, and implementing digital and sustainable practices.
The meeting will also review the regulatory framework for inland waterways and address concerns raised by states related to ongoing and proposed inland water transport projects.
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