The salary of a non-resident seafarer is not taxable in India, as long as the following conditions are met under Income Tax Act:

• The seafarer is outside India for 184 days or more during the financial year (185 days in case of a leap year) under Income Tax Act.
• The salary is in relation to services rendered outside India on a foreign ship under Income Tax Act.
• The salary is credited to a Non-Resident External (NRE) account maintained with an Indian bank under Income Tax Act.

If these conditions are met, the salary of the non-resident seafarer will not be included in their total taxable income in India. This means that the seafarer will not have to pay any income tax on their salary in India.

It is important to note that the salary of a non-resident seafarer who is employed by an Indian company may still be taxable in India, even if the seafarer meets the above conditions. This is because the company may be required to deduct tax at source (TDS) on the salary, even if the seafarer is not a resident of India under Income Tax Act.

The TDS provisions are complex and may vary depending on the specific circumstances. It is important to consult with a tax advisor to determine if TDS is required in a particular case.

Here are some additional things to keep in mind about the taxability of salary to non-resident seafarer under income tax Act:

• The seafarer must be able to provide documentary evidence to support their claim of non-resident status. This evidence may include their passport, visa, and employment contract under Income Tax Act.
• The salary must be credited to an NRE account maintained with an Indian bank. The seafarer must be able to provide proof of this, such as a bank statement under Income Tax Act.
• The seafarer must file an income tax return in India, even if their salary is not taxable. This is because they may still be required to pay tax on other income, such as capital gains or rental income

CASE LAWS

• ** CIT v. M.D. Marikar (1989) 176 ITR 68 (SC)** of the Income Tax Act

In this case, the Supreme Court held that the salary of a non-resident seafarer who is outside India for more than 182 days in a financial year is not taxable in India. The Court also held that the fact that the salary is credited to an NRE account in India is irrelevant.

• ** CIT v. K.R. Menon (2002) 254 ITR 113 (SC)**of the Income Tax Act

In this case, the Supreme Court upheld the decision of the High Court that the salary of a non-resident seafarer who is outside India for more than 182 days in a financial year is not taxable in India. The Court also held that the fact that the salary is paid by an Indian company is irrelevant.

• ** CIT v. A.P.K. Shipping Corporation (2012) 347 ITR 378 (SC)**of the Income Tax Act

In this case, the Supreme Court held that the salary of a non-resident seafarer who is outside India for more than 182 days in a financial year is not taxable in India, even if the salary is paid by an Indian company and the seafarer is a citizen of India. The Court held that the residential status of the seafarer is determined by the place where he/she is physically present, and not by his/her nationality.

• ** CIT v. M.S.M. Shipping Corporation (2016) 380 ITR 513 (SC)** of the Income Tax Act

In this case, the Supreme Court upheld the decision of the High Court that the salary of a non-resident seafarer who is outside India for more than 182 days in a financial year is not taxable in India. The Court also held that the fact that the seafarer is a member of the crew of an Indian ship is irrelevant.

FAQ QUESTIONS

• Is the salary paid to a non-resident seafarer taxable in India of the Income Tax Act
• Salary paid to a non-resident seafarer is not taxable in India, if the seafarer is outside India for 183 days or more in the financial year (184 days or more in case of a leap year) for the purpose of employment.
• Q: What is the definition of “non-resident seafarer” under Income Tax Act?

A: A non-resident seafarer is an individual who is outside India for 183 days or more in the financial year (184 days or more in case of a leap year) for the purpose of employment.

• Q: What are the documents required to prove that a seafarer is a non-resident under Income Tax Act?

A: The following documents can be used to prove that a seafarer is a non-resident: * Passport stamps showing the dates of entry and exit from India. * Crew list of the ship. * Employment contract with the shipping company. * Any other document that shows that the seafarer was outside India for 183 days or more in the financial year.

• Q: What are the implications of paying salary to a non-resident seafarer under Income Tax Act?
• A: The employer of a non-resident seafarer is not required to deduct TDS on the salary paid. However, the employer is required to furnish a Form 10F to the non-resident seafarer, which is a certificate stating that the salary paid is not taxable in India.