Non-Resident Indian (NRI) seafarers may receive income tax notices from the Income Tax Department under Section 148, Section 148A, or through e-Campaign notices. These notices generally relate to income verification, reassessment of tax returns, or compliance requirements. Professional tax consultants and Chartered Accountant (CA) services assist seafarers in responding to such notices, ensuring proper compliance with applicable tax laws and regulations.

Limited Liability Partnerships

A Limited Liability Partnership (LLP) is a business structure that combines the advantages of a traditional partnership with the benefits of a company form of organization. The concept of an LLP provides flexibility in management while offering limited liability protection to its partners, making it a suitable option for various commercial and professional activities.

NRI, OCI, and NRO Account Money Repatriation – Form 15CA and 15CB Services by Chartered Accountant

Transferring funds from India to another country from an NRO (Non-Resident Ordinary) bank account is a common requirement for Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs), and Overseas Citizens of India (OCIs). These individuals often maintain funds in their Indian NRO accounts and may need to remit money abroad for personal or financial purposes.

Professional assistance from a Chartered Accountant is typically required for preparing and certifying Form 15CA and Form 15CB, which are necessary for complying with regulatory and tax requirements related to foreign remittances.

NRI Seafarer Taxation in India – Tax Consultant and CA Services for Seafarers

Non-Resident Indian (NRI) seafarers may receive income tax notices from the Income Tax Department under Section 148, Section 148A, or through e-Campaign notices. These notices generally relate to income verification, reassessment of tax returns, or compliance requirements. Professional tax consultants and Chartered Accountant (CA) services assist seafarers in responding to such notices, ensuring proper compliance with applicable tax laws and regulations.

Limited Liability Partnerships

A Limited Liability Partnership (LLP) is a business structure that combines the advantages of a traditional partnership with the benefits of a company form of organization. The concept of an LLP provides flexibility in management while offering limited liability protection to its partners, making it a suitable option for various commercial and professional activities.

NRI, OCI, and NRO Account Money Repatriation – Form 15CA and 15CB Services by Chartered Accountant

Transferring funds from India to another country from an NRO (Non-Resident Ordinary) bank account is a common requirement for Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs), and Overseas Citizens of India (OCIs). These individuals often maintain funds in their Indian NRO accounts and may need to remit money abroad for personal or financial purposes.

Professional assistance from a Chartered Accountant is typically required for preparing and certifying Form 15CA and Form 15CB, which are necessary for complying with regulatory and tax requirements related to foreign remittances.

Company Formation

Company formation refers to the legal process of establishing a business entity in accordance with applicable laws and regulatory requirements. It involves completing registration procedures, preparing necessary documentation, and ensuring compliance with statutory obligations for operating a company.

NRI Property Sale, Capital Gain Tax Planning, Lower TDS Certificate, Form 15CA and 15CB – CA Services

Many individuals of Indian origin reside abroad and hold the status of Non-Resident Indians (NRIs) or Persons of Indian Origin (PIOs). These individuals may own immovable property in India or inherit property from their parents or grandparents.

When selling such property, NRIs and PIOs must comply with tax regulations, including capital gains tax calculation, obtaining a lower TDS certificate where applicable, and submitting Forms 15CA and 15CB. Professional Chartered Accountant services help ensure proper tax planning and regulatory compliance during the property sale process.

NRI Property Management, Valuation, and Support Services – Consultant in Delhi, India

NRIs who plan to return to India in the future often consider purchasing or managing immovable property as part of their long-term plans. Property investments in India can offer potential value appreciation over time.

Professional property management and consultancy services assist NRIs with property selection, valuation, documentation, and ongoing management to ensure smooth handling of their real estate investments.

Investment Consultancy and Business Process Outsourcing

Outsourcing non-core business functions allows organizations to access specialized expertise at a lower cost while focusing on their primary business activities. Investment consultancy and outsourcing services support businesses in improving operational efficiency and managing resources effectively.

Corporate Law Matters

Corporate law services include providing secretarial and compliance support to ensure that companies meet all statutory requirements under company law. These services typically involve preparing and filing documents with the Registrar of Companies (ROC), maintaining statutory records, and ensuring ongoing regulatory compliance.

NRI Income Tax Return in India – NRI, OCI, and Expatriate Tax ITR Services

Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), Persons of Indian Origin (PIOs), and foreign citizens residing in India (expatriates) must comply with various tax laws and regulatory requirements.

Professional tax services help these individuals prepare and file their income tax returns in India, ensuring accurate reporting and adherence to applicable legal provisions.

India Business Advisory Services

With the liberalization of the Indian economy, Indian companies are facing increased competition from new businesses and products entering the market. Business advisory services provide guidance to organizations in adapting to changing market conditions, improving performance, and maintaining competitiveness in a dynamic business environment.

Tax Consultancy for Seafarers, Merchant Navy Workers, and Mariners – Services in Delhi, Mumbai, Chennai, Kolkata, Hyderabad, Bangalore, Noida, Gurgaon, Chandigarh, Dehradun, and Other Major Cities of India

Basics About Seafarers

Before understanding the taxation of seafarers, it is important to know who qualifies as a seafarer. A seafarer, sailor, merchant navy worker, mariner, or seaman is an individual who works on board a ship or other watercraft. This person is typically part of the ship’s crew and may be engaged in various roles related to the operation, navigation, or maintenance of the vessel.

Generally, such individuals work on ships as part of their employment. Many seafarers are citizens of India and, depending on their period of stay outside the country, may be classified as Non-Resident Indians (NRIs).

How Seafarers Earn Income

In most cases, a seafarer earns income under an employment contract with a shipping company. The compensation is paid according to the terms specified in the employment agreement.

Typically, the salary is credited in foreign currency to the seafarer’s NRE (Non-Resident External) bank account maintained in India.

Taxability of Seafarer Income in India

Under the Income Tax Act, 1961, there is no specific definition for the term “seafarer.” The tax liability of an individual is determined based on their residential status. Therefore, the taxation of a seafarer’s income depends on whether the individual is classified as a resident, non-resident, or not ordinarily resident in India.

Resident Seafarer

If a seafarer stays in India for 182 days or more during a financial year, the individual is considered a resident in India. If the person is further categorized as an Ordinary Resident, then their global income becomes taxable in India.

As a result, income earned from employment on a ship would also be subject to taxation in India.

Non-Resident or Not Ordinarily Resident Seafarer

If a seafarer stays in India for less than 182 days during a financial year, the individual may be classified as a Non-Resident. Additionally, based on previous years’ records, the individual may be categorized as Not Ordinarily Resident.

In such cases, foreign income is generally not taxable in India, provided the income is received outside India. According to clarification issued by the Central Board of Direct Taxes (CBDT), income credited to an NRE account is considered as income received outside India.

Judicial Pronouncements

Until April 2017, there was significant litigation and uncertainty regarding the taxability of income earned by seafarers and credited to NRE accounts. Various judicial decisions clarified that for individuals working outside the territorial waters of India, income earned and accrued outside India is not taxable in India if it is received in an NRE bank account.

Central Board of Direct Taxes (CBDT) Circular No. 13/2017 Dated April 11, 2017

The Central Board of Direct Taxes (CBDT) issued Circular No. 13/2017 dated April 11, 2017, providing important clarifications and guidance regarding the taxation of seafarers. The circular clarified that salary earned by a seafarer while working on foreign ships and accruing outside India shall not be taxable in India, subject to certain conditions.

The salary of a seafarer will generally not be taxable in India when the following conditions are satisfied:

• The salary is credited to a Non-Resident External (NRE) account with an Indian bank.
• The salary accrues outside India in connection with services rendered on a foreign ship.
• The individual receiving the salary qualifies as a Non-Resident in India as per the provisions of the Income Tax Act, 1961.

With the issuance of this circular, it became clear that merely receiving income in an NRE bank account does not automatically make the income taxable in India under the concept of “receipt in India.” This clarification has provided significant relief to seafarers by reducing unnecessary disputes and litigation related to taxation.

Calculation of Number of Days Outside India – Rule 126 of Income Tax Rules

(Income Tax Notification No. 70/2015 Dated August 17, 2015)

As per the Income-tax (Twelfth Amendment) Rules, 2015, effective April 1, 2015, specific provisions were introduced for seafarers and merchant navy employees to determine the number of days spent outside India.

Under Rule 126 of the Income Tax Rules, the period during which a seafarer is considered to be outside India is calculated as follows:

• The counting begins from the sign-on date recorded in the Continuous Discharge Certificate (CDC) of the seafarer.
• The counting ends on the sign-off date recorded in the CDC.

This rule applies when the ship is traveling from an Indian port to a foreign port or vice versa. Therefore, once a seafarer signs on in the CDC, the period of stay outside India begins and continues until the sign-off date is recorded.

This method of calculation is beneficial for seafarers as it provides a clear and standardized approach to determining their residential status for tax purposes.

New Rule of Residential Status (120-Day Stay in India Rule) – Finance Act 2020

Impact on Seafarers and Merchant Navy Personnel

Typically, seafarers and merchant navy employees spend more than 185 days at sea, which results in their physical stay in India being less than 182 days during a financial year. Under traditional tax rules, this situation generally qualifies them as Non-Residents in India.

However, the Finance Act 2020 introduced changes to the residential status provisions. Under the revised rules, an individual who is a citizen of India may be classified as a Resident in India if:

• The individual stays in India for 120 days or more during a financial year, and
• The individual’s total taxable income in India exceeds ₹15 lakh during that financial year.

This change created concerns for seafarers, as many of them may stay in India for more than 120 days even though their total stay remains less than 182 days.

Important Clarification for Seafarers

In most cases, the 120-day rule will not apply to seafarers because:

• Their primary income is earned outside India while working on ships.
• Such foreign income is generally not included in the calculation of taxable income in India for determining the ₹15 lakh threshold.

Even if a seafarer meets the 120-day condition and has taxable income in India exceeding ₹15 lakh, the individual is typically categorized as a Not Ordinarily Resident (NOR) rather than a full resident. This classification provides certain tax relief, as foreign income may still remain outside the scope of Indian taxation.

Recent Budgets Impact on Seafarers and Merchant Navy Personnel

Recent Union Budgets have introduced several provisions that significantly affect seafarers and merchant navy workers, particularly in relation to income tax compliance and filing flexibility. Notably, Budget 2022 introduced key administrative changes, while Budget 2025 further expanded the time window for filing updated Income Tax Returns (ITRs). Below is a brief summary of these important developments.

Additional Time for Filing Income Tax Returns (ITR)

Under earlier tax provisions, an Income Tax Return (ITR), including a belated return with applicable penalty fees, generally could not be filed or revised after December 31 of the relevant assessment year, unless the government extended the deadline through a specific notification.

For example:
The ITR for Financial Year (FY) 2021–22 previously could not be filed or revised after December 31, 2022.

With the introduction of Section 139(8A) of the Income Tax Act, taxpayers are now allowed to file an Updated Income Tax Return within an extended time frame. Initially, this provision allowed filing up to 2 years from the end of the relevant assessment year, effectively providing up to 3 years from the end of the financial year.

For example:
The ITR for FY 2021–22 can now be filed up to March 31, 2025 under the updated return provisions.

This change provides significant relief for seafarers who spend extended periods at sea and may miss standard filing deadlines due to the nature of their employment.

Introduction of E-Passports and Its Impact on Residential Status Tracking

Budget 2022 proposed the rollout of e-passports equipped with embedded electronic chips. These chips are designed to securely store personal and travel-related information, including records of international arrivals and departures.

The implementation of e-passports is expected to improve coordination among government authorities by enabling automated tracking of travel data. As a result:

• Tax authorities will have more accurate records of a seafarer’s travel history.
• Determination of residential status for tax purposes will become more precise.
• Individuals who fail to maintain Non-Resident status or do not file required tax returns may face increased scrutiny.

Therefore, seafarers must exercise caution and ensure proper tax planning and compliance with residential status rules.

Budget 2025 – Updated ITR Filing Allowed for Four Previous Years

Budget 2025 further expanded the scope of the Updated Income Tax Return (ITR) provisions by extending the filing window by an additional two years. As a result, taxpayers can now file updated returns for up to four preceding financial years.

For example:
In Financial Year 2025–26, taxpayers can file updated ITRs for the following financial years:

• FY 2020–21
• FY 2021–22
• FY 2022–23
• FY 2023–24

This provision is particularly beneficial for seafarers who may have missed filing tax returns in earlier years due to extended time at sea or lack of awareness about tax obligations.

In situations where a seafarer unintentionally failed to maintain Non-Resident status or did not pay applicable taxes, the updated return facility provides an opportunity to regularize tax compliance and reduce the risk of penalties and legal consequences.

Budget 2025 Provisions for NRIs, Non-Residents, Expatriates, and Seafarers

Budget 2025 introduced several provisions aimed at improving tax compliance and providing flexibility for Non-Resident Indians (NRIs), non-residents, expatriates, and seafarers. One of the most significant changes is the extension of the time limit for filing Updated Income Tax Returns (ITR), allowing taxpayers to regularize past non-compliance and correct errors in earlier filings.

These provisions are particularly relevant for seafarers and expatriates who frequently travel or remain outside India for extended periods and may face practical challenges in meeting standard tax deadlines.

Budget 2020 Impact on Residential Status of NRIs and Seafarers

The Finance Act 2020 introduced important amendments to the rules governing the determination of residential status for Indian citizens, including NRIs and seafarers.

Under the revised provisions, an Indian citizen may be considered a resident in India if the individual stays in India for 120 days or more during a financial year and has total taxable income in India exceeding ₹15 lakh.

This amendment significantly impacted seafarers, as their work patterns often involve periodic stays in India that may exceed 120 days. However, in many cases, seafarers continue to qualify as Non-Residents because their income earned outside India is generally not included in the ₹15 lakh threshold calculation.

Seafarer Taxation – Questions Still Unclear

Despite various clarifications issued by tax authorities, certain aspects of seafarer taxation remain subject to interpretation and, in some cases, potential litigation. Some of the commonly discussed issues include the following:

1. Services on Foreign Ship vs. Indian Ship

The clarification issued by tax authorities primarily addresses income earned from services rendered on foreign ships. However, questions may arise regarding the taxability of salary received for services performed on Indian-flagged ships.

In such cases, the determination of tax liability may depend on factors such as the place where the income accrues, the employer’s location, and the residential status of the seafarer.

2. Salary Credited to NRE Account vs. Regular Bank Account

Tax guidance generally refers to salary being credited to a Non-Resident External (NRE) account. However, practical situations may arise where salary is credited to a regular savings account in India.

In these circumstances, the tax treatment may depend on whether the income is considered to be received in India and whether the seafarer qualifies as a Non-Resident under the Income Tax Act.

3. Determination of Residential Status in Certain Contractual Arrangements

In some situations, a seafarer may have an employment contract with an entity based in India while performing services on a foreign ship. This arrangement can create complexities in determining residential status under Section 6 of the Income Tax Act, 1961, particularly when considering the intent and scope of administrative circulars issued by tax authorities.

There may also be cases where a seafarer is classified as a resident based on a shorter stay threshold, such as 60 days in India, depending on the specific provisions applicable to the individual’s circumstances.

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