Months at Sea, Still Taxed as a Resident? The NRI Seafarer's 182-Day Guide
You spent most of the year at sea. Your salary came from a foreign shipping company, straight into your NRE account. Then a notice asks why that salary is missing from your Indian return.
For seafarers, residential status is not a feeling about where you live. It is a day count, and the count is decided by the dates in your Continuous Discharge Certificate (CDC).
Quick answer: an Indian citizen working on ships is a non-resident for a tax year if he spends fewer than 182 days in India. Rule 8 of the Income-tax Rules, 2026 removes the whole CDC period of an international voyage from that count, port calls included. A non-resident's salary for service on a foreign ship outside India is not taxed just because it lands in an NRE account.
Contents
Which residence test applies to a seafarer?
Under section 6(2) of the Income-tax Act, 2025 (old section 6(1)), an individual is resident in a tax year if either test is met:
He is in India for 182 days or more in the tax year; or
He is in India for 60 days or more in the year and 365 days or more in the four preceding years.
Section 6(3) (old Explanation 1(a) to section 6(1)) switches off the second test for an Indian citizen who leaves India in the year as a member of the crew of an Indian ship, or for employment outside India. Seafarers joining foreign-going ships are normally covered by one of these limbs.
So, in practice, one number decides it: 182 days in India. Below that, the seafarer is non-resident, subject to the ₹15 lakh points discussed below.
The basic tests are explained in more detail in 182, 120 or zero days: when an NRI becomes a tax resident.
How rule 8 counts your days: the CDC window
A ship on an international voyage often calls at Mumbai, Kandla or Chennai. Without a special rule, each of those days could be argued to be a day "in India", which under section 2(52) includes territorial waters and other maritime zones.
Section 6(6) (old Explanation 2 to section 6(1)) lets the rules fix how a citizen crew member of a foreign-bound ship counts days for a voyage. Rule 8 of the Income-tax Rules, 2026 (old rule 126, inserted by Notification 70/2015) does this:
The excluded period begins on the date entered in the CDC for joining the ship for an eligible voyage.
It ends on the date entered in the CDC for signing off from that ship for that voyage.
Everything in between is left out of the period of stay in India, even if the ship is berthed at an Indian port.
The CDC is the document defined in the Merchant Shipping (Continuous Discharge Certificate-cum-Seafarer's Identity Document) Rules, 2001. Your own diary or the agency's email is not a substitute.
Which voyages qualify, and which do not
Rule 8(3)(b) defines an eligible voyage as one undertaken by a ship carrying passengers or freight in international traffic, where:
a voyage starting at an Indian port has a destination outside India; or
a voyage starting outside India has a destination in India.
Voyages between two foreign ports need no rule: you are outside India anyway. The difficult cases are the ones the rule does not cover:
Coastal voyages between two Indian ports.
Offshore supply vessels, rigs, dredgers or survey ships working in Indian waters or the exclusive economic zone.
Time on leave, training ashore in India, or waiting in India between contracts.
These days are counted under section 6 in the ordinary way, so a crew member on Indian offshore work can become resident even with months on board.
Worked example 1: two contracts, 126 days at home
Tax year 2026-27 runs from 1 April 2026 to 31 March 2027 (365 days). A second officer, an Indian citizen employed by a Singapore ship manager, has this pattern:
At home in India from 1 April to 14 May 2026: 44 days.
CDC sign-on at Mumbai on 15 May 2026, sign-off at Mumbai on 10 November 2026. The tanker called at Indian ports for 9 days during the contract.
At home from 11 November 2026 to 31 January 2027: 82 days.
CDC sign-on at Singapore on 1 February 2027, still on board at 31 March 2027.
Days in India = 44 + 82 = 126 days. The 9 port days fall inside the CDC window and are excluded under rule 8. Since 126 is below 182, and the 60-day test does not apply, he is non-resident for 2026-27.
His ₹36 lakh salary, paid by the foreign employer for service on board outside India, is not included in his Indian total income merely because it was credited to his NRE account. NRE interest is exempt under Schedule IV, Sl. No. 1 (old section 10(4)(ii)), while NRO interest and Indian rent remain taxable.
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Worked example 2: one short contract, 258 days at home
Now take a cadet officer whose only contract in 2026-27 is CDC sign-on on 1 July 2026 and sign-off on 15 October 2026.
At home from 1 April to 30 June 2026: 91 days.
At home from 16 October 2026 to 31 March 2027: 16 + 30 + 31 + 31 + 28 + 31 = 167 days.
Days in India = 258, well above 182.
He is resident for 2026-27. The next question is whether he is ordinarily resident:
If not ordinarily resident (for example, non-resident in 9 of the 10 preceding years under section 6(13)(a)), foreign income such as salary for service outside India is taxed only if it comes from a business controlled or profession set up in India (section 5(1)(c)). His ship salary stays out.
If ordinarily resident, his global income is taxable. On ₹30 lakh of salary under the default new regime in section 202, after the ₹75,000 standard deduction, tax is about ₹4,57,500 plus 4% cess, roughly ₹4.76 lakh.
One extra contract of about 80 days would have changed the answer. That is why seafarers should look at the residence count before accepting a long shore leave late in the year.
Is your salary taxable if you are non-resident?
A non-resident is taxed under section 5(2) only on income received or deemed received in India, or accruing or deemed to accrue in India. Salary for work done on a foreign ship outside India accrues outside India.
Before 2017, some assessing officers taxed such salary because it was first credited to an NRE account in India. CBDT Circular 13/2017 dated 11 April 2017 clarified that salary accrued to a non-resident seafarer for services rendered outside India on a foreign ship is not included in total income merely because it is credited to his NRE account.
The Calcutta High Court applied the circular in Sumana Bandyopadhyay v. DDIT (13 July 2017), deleting an addition of about ₹14.8 lakh made on a marine engineer's NRE salary. The circular was issued under the 1961 Act, but section 5(2) of the 2025 Act uses the same receipt and accrual tests, so the reasoning carries over. We did not find a fresh circular under the new Act.
Three limits to keep in mind:
The relief assumes non-residence. If you are resident and ordinarily resident, the salary is taxable wherever it is paid.
It speaks of service on a foreign ship outside India. Salary for service in Indian waters needs separate analysis.
Indian income such as rent, NRO interest and capital gains stays taxable, usually with TDS at non-resident rates. See TDS on NRO FD interest for NRIs.
The ₹15 lakh traps: section 6(5) and deemed residence
Two newer provisions catch seafarers with large Indian income, meaning total income other than income from foreign sources (section 6(14)):
Section 6(5): a citizen who is outside India and comes on a visit, with such income above ₹15 lakh, faces a 120-day test (with 365 days in the preceding four years) instead of 60. Resident status here is not ordinarily resident under section 6(13)(b).
Section 6(7): a citizen with such income above ₹15 lakh who is not liable to tax in any other country because of domicile or residence is deemed resident, and section 6(13)(c) treats him as not ordinarily resident.
Many seafarers are not tax residents anywhere because they live at sea, so section 6(7) is real for anyone with big Indian rent, interest or gains. Ship salary is foreign-source income and does not count towards the ₹15 lakh, and a not-ordinarily-resident person is still not taxed on it.
Decision checklist for each tax year
Collect the CDC, every contract and passport entries for 1 April to 31 March.
Mark each sign-on and sign-off date and confirm each voyage was international, to or from India.
Count days in India outside the CDC windows, including leave, training and waiting days.
If the count is 182 or more, test not-ordinarily-resident status under section 6(13).
If below 182, check whether Indian income other than foreign-source income exceeds ₹15 lakh, and if so test sections 6(5) and 6(7).
Make sure salary goes into an NRE account (or abroad), not a resident savings account, and that resident accounts were redesignated after you became non-resident under FEMA.
Decide whether a return is needed for Indian income, and claim credit for any TDS.
For the filing side, see NRI return filing in India. For the previous year (financial year 2025-26, assessment year 2026-27), a missed return can still be filed as a belated return under section 139(4) of the 1961 Act until 31 December 2026, with the late fee under section 234F.
Common mistakes
Counting from passport stamps alone. Rule 8 uses CDC dates. Passport stamps help, but port calls inside a voyage can make the passport count look higher than the legal count.
Treating offshore or coastal work as sea time. Only eligible international voyages get the rule 8 exclusion.
Forgetting days spent in India between contracts. Training courses, medical checks and waiting for the next ship all count.
Using a resident savings account. Once non-resident under FEMA, accounts must be redesignated. Salary in a resident account also invites questions on receipt in India; see NRE vs NRO vs FCNR(B) accounts.
Ignoring Indian income. Non-residence does not shelter rent or gains in India, and the 31.2% type TDS often exceeds the real tax.
Not replying to the notice with documents. A short reply with the day-count table, the CDC pages and the circular usually answers the question.
Practitioner insights
Prepare the day count as a table, voyage by voyage, with CDC page references. Assessing officers and appellate authorities respond better to a reconciled schedule than to a total.
Where the CDC entry and the contract dates differ, the CDC governs under rule 8. Explain the difference rather than averaging it.
Residence is decided separately for every tax year. A non-resident year does not carry forward, and a long leave in one year can flip the status.
Where an Indian employer deducted TDS on salary, claim it in the return and then examine whether the salary is taxable at all, instead of accepting the deduction as final.
If another country also treats the seafarer as resident, the tie-breaker in the tax treaty decides; see how the DTAA tie-breaker decides.
For notices on NRE salary, cite section 5(2), Circular 13/2017 and the CDC schedule. If the officer still adds it, the dispute route is an appeal; see income tax notice to an NRI: how to reply from abroad.
Summary table: old and new references
Item | Income-tax Act, 1961 | Income-tax Act, 2025 |
|---|---|---|
182-day and 60-day tests | Section 6(1)(a) and (c) | Section 6(2)(a) and (b) |
60-day test off for crew and overseas employment | Explanation 1(a) to section 6(1) | Section 6(3) |
Visit to India and 120-day test | Explanation 1(b) to section 6(1) | Section 6(4) and (5) |
Seafarer day count for voyages | Explanation 2 to section 6(1); rule 126 | Section 6(6); rule 8 of the Income-tax Rules, 2026 |
Deemed residence | Section 6(1A) | Section 6(7) |
Not ordinarily resident | Section 6(6) | Section 6(13) |
Scope of income of a non-resident | Section 5(2) | Section 5(2) |
NRE interest exemption | Section 10(4)(ii) | Schedule IV, Sl. No. 1 |
Definition of India | Section 2(25A) | Section 2(52) |
Frequently asked questions
How many days must a seafarer spend outside India to be an NRI?
An Indian citizen who leaves India for employment outside India is resident only if he is in India for 182 days or more in the tax year (section 6(2)(a) read with 6(3) of the Income-tax Act, 2025). In a 365-day year that means at least 184 days outside India, counting rule 8 voyage periods as outside.
Are days at Indian ports counted as days in India for seafarers?
Not if they fall within the period of an eligible voyage. Rule 8 of the Income-tax Rules, 2026 (old rule 126) excludes everything from the joining date to the signing-off date entered in the Continuous Discharge Certificate, even when the ship calls at Indian ports.
Is a seafarer's salary credited to an NRE account taxable in India?
For a non-resident, salary for services rendered outside India on a foreign ship is not taxable merely because it is credited to an NRE account in India (CBDT Circular 13/2017, 11 April 2017, on section 5(2)(a)). Residence must be established first.
Do coastal voyages count under the seafarer rule?
No. Rule 8 covers only eligible voyages carrying passengers or freight in international traffic between an Indian port and a foreign port. Days on coastal runs, or on vessels working in Indian waters, are counted normally.
Does the 120-day rule apply to seafarers?
It can. Section 6(5) applies 120 days instead of 60 to a citizen visiting India whose Indian income, excluding foreign-source income, exceeds ₹15 lakh. A seafarer with large rent, interest or capital gains in India should check it alongside deemed residence under section 6(7).
Which document proves a seafarer's NRI status?
The Continuous Discharge Certificate with its sign-on and sign-off entries is the document rule 8 relies on. Keep it with employment contracts, passport stamps and the employer's sea-service records for each year.
Does an NRI seafarer need to file an income tax return?
Only if Indian taxable income exceeds the basic exemption limit or another filing condition applies. Filing is still useful to claim refunds of TDS on NRO interest or rent and to keep a clear record of non-resident status.
Related reading
Sources
Income-tax Act, 2025 as amended (text on incometaxindia.gov.in): sections 2(52), 5, 6 and 202, Schedule IV. Income-tax Rules, 2026 (G.S.R. 198(E), 20 March 2026), rule 8. Income-tax Act, 1961: sections 5(2), 6, 10(4)(ii), 139(4), 234F; Income-tax Rules, 1962, rule 126 (Notification 70/2015). CBDT Circular No. 13/2017 dated 11 April 2017. Sumana Bandyopadhyay v. Deputy Director of Income Tax, Calcutta High Court, 13 July 2017. Figures in the worked examples are illustrative and ignore rounding.
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