Subscribe To Our Free Newsletter:

Imp CBDT Circular Regarding Taxability Of Salaries Of Non-Resident Seafarers Credited To NRE Accounts Maintained With Indian Banks

The CBDT has issued Circular No. 13/2017 dated 11.04.2017 in which it has clarified the law 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. This Circular is important in view of the law laid down by the Kolkata Bench of the Tribunal in Tapas Kumar Bandopadhyay vs. DDIT where it was held that even if the salary of a non-resident seaman accrued outside India, it was taxable in India if the employer credited it to the assessee’s NRE account. In Utanka Roy vs. DIT (Calcutta High Court) it was clarified that salary received by a non-resident for services rendered abroad accrues outside India and is not chargeable to tax in India. The source of the receipt is not relevant.




Circular No. 13/2017

F. No: 500/07/2017-FT TFt-V
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
Foreign Tax a Tax Research – Il
FT & TR-V Division

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 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.

(Subash Jangala)

Under Secretary (FT&TR-V)

Posted in All Information, Others

Leave a Reply

Your email address will not be published. Required fields are marked *

*


If you are a tax professional, you must sign up for our free newsletter. Why? Because we keep you informed about the latest developments in the world of tax. We focus only on the most important must-read judgements & articles that will impact your day-to-day professional work. You can see a chronological listing of all our postings on twitter & facebook


IMPORTANT: After signing up & clicking on the confirmation mail, send a test/ blank mail to editor@itatonline.info. Why? Because it is the easiest way to add our email address to your address/ contacts book and ensure that our Newsletter does not get sent to the Spam/ Junk folder


Email



Unsubscribe