ITAT evaluates taxability of ₹48.86 lakh salary earned by Indian seafarer on foreign ships, focusing on residential status and 182-day rule under Income Tax Act.
ITAT Examines Taxability of ₹48.86 Lakh Salary Earned by Indian Seafarer
The Income Tax Appellate Tribunal (ITAT) is currently examining the taxability of ₹48.86 lakh earned by an Indian citizen working as a seafarer on foreign-flagged vessels. The core issue is whether the individual qualifies as a resident and ordinarily resident (ROR) under Section 6(1) of the Income Tax Act, 1961, particularly the 182-day physical presence threshold.
The department assessed the income on grounds that the seafarer spent more than 182 days in India during the relevant financial year. The appellant countered that maritime employment involves unique travel patterns and that days aboard ships in international waters should not count toward physical presence. The ITAT referred to Rule 8 of the Income Tax Rules and judicial guidance in ITO v. Rajendra Prasad Agarwalla, which recognizes seafarer-specific circumstances.
The decision could clarify how residency is computed for itinerant workers under Indian tax law. If non-resident status is upheld, foreign-earned salary would be exempt under Section 9(1)(ii). Taxpayers in offshore roles may benefit from a more nuanced interpretation of residence rules based on this precedent.
