How is a seafarer's income taxed?
—Name withheld on request Being a seafarer, there are certain concessions granted to you for determination of tax residence in India under the Income Tax Act, 1961 (ITA). Since you have left Indian territory as a crew member on an Indian-flag ship, you have to cross the threshold of 182 days or more stay in India in order to qualify as a tax resident of India.
In your case, since you have stayed in India for only 135 days during the previous financial year, you will not satisfy this test and accordingly you will not become a resident under the normal provisions which determine tax residence on the basis of period of stay in India. However, the ITA has been amended since FY 2020-21 to provide for a deemed residence test.
Under this test, even if you qualify as a non-resident (by taking into consideration that your period of stay in India is below the threshold of 182 days), you could still become a tax resident of India if you are not liable to tax in any other country and that you have Indian income exceeding ₹15 lakh for the particular financial year in question. In your case, apart from the fact that do not qualify as a resident based on your period of stay in India, ordinarily you would not become a tax resident of any other country since you were working on-board the ship for rest of the period when you were not present in India.
Further, assuming that the capital gains income (after considering indexation) from sale of land exceeds ₹15 lakh, you will become a deemed tax resident of India under this additional test. For persons becoming deemed tax resident of India, incomes which accrue outside India (barring some) are not taxable in India.
Read more on livemint.com
