Who is a seafarer?
A seafarer or merchant navy worker is someone who works for a shipowner to do ship service on the sea. Work performed by seafarers includes assisting as a crew member in the operation and maintenance of ships as part of his/her contractual employment.
As far as the special rules for merchant navy are concerned, there is no specific provision of exemption or taxation for a seafarer or merchant navy under the Income Tax Act 1961.
Indian seafarers salary
Resident: The seafarer is paid remuneration in the form of salary by the employer company. The salary received by a resident seafarer will be taxed as per the laws of the income-tax department. No special exemption is offered.
Non-Resident: If a crew member of a ship stays outside India for 183 days or more during the financial year (184 days or more in case of a leap year) as per his/ her CDS (Continuous Discharge Certificate) or passport, he/ she becomes a Non-Resident. A new section has been added to define the NRI status, which is effective from the Financial Year 2020-21. The salary of a Non-Resident seafarer won’t be included in the total taxable income of the seafarer.
Since seafarers don’t file ITR anywhere in the world, it is important and beneficial for a seafarer to file an ITR in India. However, it is not mandatory under the Indian Income Tax Law.
Due to a complicated tax system, understanding tax laws can be confusing and NRIs or seafareres may miss claiming deductions and other benefits. At SBNRI, we understand this struggle. You can download SBNRI App to connect with our NRI Tax Experts and get end-to-end assistance related to NRI tax filing. SBNRI will also help you get a lower TDS Certificate.