Merchant Navy salary of non-resident in NRE account in Indian Bank not taxable if services rendered outside India on a foreign ship-CBDT Circular 13/2017 as amended by Circular No. 17/2017
F. No: 500/07/2017-FT & TR-V
Government of India
Ministry of Firlance
Department of Revenue
Central Board of Direct Taxes
Foreign Tax & Tax Research- II
FT & TR-Y Division
Circular No. 13/2017
New Delhi, dated 11.04.2017
Subject: Clarification regarding liability to income-tax in India for a non-resident seafarer receiving remuneration in NRE (Non Resident External) account maintained with an Indian Bank.
Representations have been received in the Board that income by way of salary, received by non resident seafarers, for services rendered outside India on-board foreign going ships (with Indian Flag or Foreign Flag), are being subjected to tax in India for the reason that the salary has been received by the seafarer into the NRE bank account maintained in India by the seafarer.
2. The matter has been examined in the Board. Section 5(2)(a) of the Income-tax Act provides that only such income of a non-resident shall be subjected to tax in India that is either received or is deemed to be received in India. It is hereby clarified that salary accrued to a non-resident seafarer for services rendered outside India on a foreign ship shalt 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.
(Subhash Jangala)
Under Secretary (FT & TR-V)
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