The Ministry of Ports, Shipping and Waterways has expanded India’s Tonnage Tax Scheme to include inland vessels, a move aimed at strengthening the country’s inland waterways ecosystem and promoting sustainable transport.
Previously applicable only to seagoing ships, the scheme will now cover inland vessels registered under the Inland Vessels Act, 2021. The expansion is expected to encourage greater private participation in inland water transport by offering a predictable and simplified tax regime to operators.
The change has been implemented through amendments to the Income-tax Act, 1961 under the Finance Act, 2025. The revised provisions will come into effect from 1 April 2026 and will apply from Assessment Year 2026–27, corresponding to the financial year 2025–26 onwards.
By extending the tonnage tax framework to inland shipping, the government aims to provide long-term tax certainty and policy support, making inland waterways a more attractive mode of transport. The reform also aligns with India’s broader push for efficient, cost-effective, and environmentally sustainable multimodal logistics, reducing dependence on road transport and lowering overall logistics costs.
