Navigating Seafarer Taxes: Your Guide
to Smooth Sailing Through Tax Season
Filing income tax returns is a
routine task for individuals in India, but when it comes to seafarers, the
process can be a bit more intricate. In this guide, we'll explore the nuances
of filing income tax returns for seafarers, with a focus on understanding
residential status and the associated tax implications.
Residential Status:
The calculation of income tax is
not solely based on earnings; it is also influenced by an individual's
residential status. Residential status is determined by the number of days an
individual has spent in India, and it is divided into two main categories:
Under the resident category, there are further distinctions:
Determining
Residential Status:
The Income Tax Act of 1961
outlines specific rules and conditions for determining an individual's
residential status.
?
A Resident Ordinarily Resident is defined as
someone who has been a resident of India in at least 2 out of the 10
immediately preceding years and has a total stay in India of at least 730 days
in the 7 immediately preceding years.
Calculating Days
Spent Outside India:
For seafarers, determining the
number of days spent outside India is crucial. The date of leaving stamped on
the passport marks the departure from India, and the day of return indicates
the end of the stay outside India. For seafarers, the day of joining the ship,
as indicated on the Continuous Discharge Certificate (CDC), is considered the
day of leaving India, regardless of whether the ship is near Indian shores.
Taxability of
Seafarers:
The tax implications for seafarers vary based on their
residential status:
It's important to clarify that these conditions specifically apply to
seafarers engaged in work on foreign ships. If a seafarer is working on an
Indian ship, their salary from the ship becomes taxable regardless of their
residential status, whether they are a resident or a non-resident.
According to the guidelines
outlined in CBDT circular no. 13/2017,
certain conditions must be met for the exemption of salary from income tax. The
exemption applies when:
Only when all these criteria are
satisfied will the salary be exempted from income tax as per the specified
circular.
Tax Implications for NRIs:
For Non-Resident Indians (NRIs),
certain incomes are taxable, while others are exempt: Taxable Income for NRIs:
Exempt Income for NRIs:
An allowance refers to a fixed sum of money provid
Read MoreIntroduction On July 11, 2024, the Central Boar
Read MoreFiling Income Tax Returns (ITR) is a crucial annua
Read MorePaying taxes is a fundamental duty for individuals
Read MoreIn today's fast-paced financial environment, a
Read More2024 Ampuesto Consultancy Private Limited. All rights reserved. Managed by Weeb Innovation