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[CBDT] 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

Central Board of Direct Taxes (Foreign Tax & Tax Research - II, FT & TR-V Division) Circular No. 13/2017 dated 11.04.2017

1. 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 ships, 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 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.

Corrigendum (to above circular) by circular no. 17/2017 dated 26th April, 2017 - link

In Line 4 of Paragraph No. 2 of the captioned circular, the word "foreign ship" may be read as "foreign going ship (with Indian flag or foreign flag)".

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