Income Tax rules for Indian Seafarers 2018 for F.G. and Coastal ships.

Income tax rules for Indian sailors are different than other Indian citizens. These rules are unclear to most of the CAs and even to Income Tax officials. In this article we will try to explain these rules in simple terms. We will cover following topics in this article.

Ø  Foreign Flagged Foreign Going vessels

Ø  Indian Flagged Foreign Going vessels

Ø  Foreign Flagged Coastal vessels

Ø  Indian Flagged Coastal vessels

What is NRI status ?

If a person stays outside India for more than 183 days in a financial year ( i.e. from 1st April to 31st March ) his resident status will be NRI for that financial year.

Case 1 : Ship is Foreign Going and salary is in foreign currency-

If you complete NRI days then your income is totally tax free and you don't have to pay any Income tax. You also don’t require to file IT Return.
But if you fail to complete NRI days you have to pay Income tax as per Income tax rules for that Financial Year.

Ø  For Foreign flagged ships, NRI days will be counted as per date on Passport

Ø  For Indian flagged ships, NRI days will be counted as per date on CDC

Case 2 : Ship sometimes coming to India and salary is in foreign currency-

If you complete NRI days then your income is totally tax free and you don't have to pay any Income tax. You also don’t require to file IT Return.

Ø  NRI days will be counted as per stamp on CDC for both Indian & Foreign flagged ships.

Note : At least one Port in the voyage should be Foreign Port.  If a voyage starts from Indian port & Ends in Indian Ports, then that voyage will NOT be counted for NRI days.

Watch the video for more description :
Case 3 : Ship is always sailing in Indian waters ( Full time coastal ship )

You have to pay Income Tax as per Income Tax rules whether you are sailing in Foreign Flagged vessel or in Indian flagged ship.

Points to Remember :

1.    Dates stamped should be included for counting days stayed outside India.

2.    In order to get exemption from Income Tax due to NRI status, payment must be given in foreign currency and NOT in Indian Rupee