Mumbai, May 23, 2017
Government of India has now provided major relief to the non-resident seafarers working on foreign going ships, vide circular no 13 of 2017 of the Central Board of Direct Taxes, Ministry of Finance.
In the recent past, the Income-Tax Tribunals had ruled that the Income of non–resident seafarers, which is directly received into their NRE Account maintained in India shall be taxable. Following the same, the Seafarers associations/Unions had represented to the Government of India requesting for a clarification in the matter.
After examining the matter, Central Board of Direct Taxes, Ministry of Finance has issued a Circular No 13 of 2017 on 11.4.17 followed by a corrigendum dt 26.4.17, clarifying that the salary accrued to a non-resident seafarer for services rendered outside India on a foreign going ship (with Indian or foreign flag) shall not be included in the total income merely because the said salary has been credited in the NRE account maintained with an Indian bank by the seafarer.
With the above clarification, the non-resident seafarers working on the foreign going ships (Indian or foreign flag) can receive their wages/salary directly into their NRE account maintained in India without the same being subjected to Income-Tax.
