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Filing Income Tax Returns (ITR) can be confusing for many, and even more so for seafarers who spend a large part of the year outside India. Questions like “Do I need to file ITR if I work on a ship?” or “Am I considered an NRI for tax purposes?” are common. The answer depends on your residential status, how many days you spend in India, and how you receive your income.
In this guide, we’ll break down the ITR filing process for seafarers in simple terms—who needs to file, what documents are required, and how to determine your taxability based on your time spent outside India. Whether you’re a first-time filer or looking to understand your tax situation better, this guide is here to help you sail smoothly through tax season.
Latest updates
- ITR filing Due date for FY 2024-25 (2025-26) has been extended from 31st July 2025 to 15th September 2025
Benefits of ITR Filing for Seafarers
- Helps claim refund of TDS deducted by employer or bank
- Required for obtaining personal, home, or business loans, term insurance
- Acts as valid proof of income for visa applications and government tenders
- Helps in establishing NRI status based on number of days outside India
- Ensures compliance with Indian tax laws and avoids legal notices
- Useful in case of remittance scrutiny by RBI or Income Tax Department
- Facilitates smooth financial planning and record-keeping
- Helps in future asset purchases by showing income trail
- Makes it easier to revise or update records in case of any discrepancy
Who is a Seafarer?
Before delving into the specifics of seafarer taxation, it’s essential to clarify who qualifies as a seafarer. A seafarer, often referred to as a sailor, merchant navy personnel, mariner, or seaman, is an individual employed on a ship. This person is a member of the ship’s crew and may work in various roles related to the vessel’s operation and maintenance. Seafarers typically spend extended periods at sea as part of their job. Most seafarers from India are Indian citizens, but due to the nature of their work, they often qualify as Non-Resident Indians (NRIs) for tax purposes, depending on the time spent outside the country. Understanding this distinction is crucial for accurately calculating their tax liabilities and benefits.
Taxability of Seafarer's Income in India
The Income Tax Act, 1961 does not specifically define “Seafarer” or “Merchant Navy.” There are no specific provisions for exemption or taxation for these professions. Generally, a seafarer or merchant navy worker is someone who works on a ship, navigating or assisting as a crew member in the operation and maintenance of the vessel as part of their contractual employment.
Taxability under the Income Tax Act is based on an individual’s residential status, whether they are a seafarer, merchant navy worker, or any other profession. Seafarers, typically Indian citizens, are classified as Non-Resident Indians (NRIs) based on their days of stay in India.
Resident Seafarer: If a seafarer stays in India for 182 days or more during a financial year, they are considered a Resident. If also categorized as an Ordinary Resident, their global income, including earnings from ship work, is taxable in India.
Non-Resident or Not Ordinary Resident Seafarer: If a seafarer stays in India for less than 182 days in a financial year, they may be classified as a Non-Resident. If classified as Not Ordinary Resident based on past records, their foreign income is not taxable in India. However, they must ensure that this income is received outside India. As per CBDT clarification, income deposited in an NRE account is considered received outside India and thus not taxable in India.
On April 11, 2017, the income tax department issued Circular No. 13/2017, providing clarifications on seafarer taxation. The circular specifies that the salary of seafarers accrued outside India on foreign ships is not taxable in India if the following conditions are met:
- The salary is received in a Non-Resident External (NRE) account with an Indian bank.
- The salary accrual is for services rendered on a foreign ship.
- The individual earning the salary is classified as a Non-Resident in India under the Income Tax Act.
How to calculate Residential status?
The Income tax department issued Notification No. 70/2015 on August 17, 2015, providing guidelines for calculating the number of days a seafarer spends outside India. This notification addresses the litigation surrounding the determination of days spent outside India for ship workers and merchant navy employees.
According to the Income-tax (Twelth Amendment) Rules, 2015, effective from April 1, 2015, the computation of days outside India is based on the Continuous Discharge Certificate (CDC). Specifically, the days are counted from the sign-on date to the sign-off date recorded in the CDC. This method helps seafarers maintain their Non-Resident status in India, as it provides a clear framework for determining their period outside the country.
What is New Residency Rule of 120 days?
Previously, individuals, including seafarers, were classified as Residents in India if they stayed in the country for 182 days or more in a financial year. Typically, seafarers planned their schedules to spend more than 182 days at sea, ensuring they stayed in India for less than 182 days, often between 4-6 months.
The Budget 2020 introduced a new rule stating that Indian citizens can be classified as Residents if they stay in India for 120 days or more and have a taxable income exceeding ₹15 lakh, excluding foreign ship income. However, most seafarers do not have taxable income in India above ₹15 lakh, so the new 120-day rule generally does not apply to them. They continue to be assessed under the 182-day rule. If a seafarer does meet the ₹15 lakh income threshold and stays over 120 days, they will be classified as Not Ordinary Resident (NOR), which has different tax implications. Proper tax advice should be sought to avoid litigation.
What are Deductions and exemptions available to Seafarers?
Salary earned by NRIs outside India and credited to a foreign account is exempt from tax in India
Up to ₹1.5 lakh deduction under Section 80C for investments like PPF, ELSS, life insurance, and tax-saving FDs
Deduction under Section 80D for health insurance premiums – up to ₹25,000 for self and family, and ₹50,000 for senior citizen parents
Donations to eligible funds and charities qualify for deduction under Section 80G
Standard 30% deduction on rental income from house property in India
Deduction up to ₹2 lakh on home loan interest under Section 24 for self-occupied property
Interest earned on NRE savings and fixed deposits is tax-free for NRIs
No tax on foreign allowances or income earned outside India if NRI status is maintained
Is ITR filing for Seafarers mandatory?
No, ITR filing is not required if your income from all sources including salary income is below the basic exemption limit of Rs. 2,50,000 under Old regime or Rs. 3,00,000 under new regime. In case the residential status is Non Resident Indian (NRI) then even if income is above basic exemption limit, ITR filing will not be compulsory for seafarer.
But even though it is not compulsory, it is highly recommended as ITR filing helps in building financial history, serves as income proof for applying for loan, credit card, Visa, helps to answer income tax notice with ease.
Which ITR form is applicable for Seafarers?
ITR-1: This form is for individuals with income from salary/pension, one house property, other sources (like interest income and total income up to ₹50 lakh. Individuals with business or professional income and capital gains cannot use this form.
ITR-2: This form is for individuals who do not have income from business or profession. It covers income from salary/pension, house property, capital gains, and other sources.
Hence Seafarers can use either ITR-1 or ITR-2 depending on income sources other than salary. If the Status of Seafarer is Non resident then ITR-2 is compulsory. If Seafarer is resident then either ITR-1 or ITR-2 will be applicable depending on other income.
Income tax rates for Seafarers
Old tax Regime
| Income | Tax rates |
| Upto ₹ 2.50 lakh | 0% |
| ₹ 2.50 lakh – ₹ 5 lakh | 5% |
| ₹ 5 lakh – ₹ 10 lakh | 20% |
| Above ₹ 10 lakh | 30% |
You Can claim deduction under Section 80C, 80D, 80G, etc
For senior citizen (age between 60 & 80 years), tax rate is 0% upto ₹ 3 lakhs. Rest of the rates are same.
For super senior citizen (age above 80 years), tax rate is 0% upto ₹ 5 lakhs. Rest of the rates are same.
In Old tax regime, a maximum tax rebate under section 87A of Rs. 12,500 is available for income upto Rs. 5 lakhs meaning your income is totally tax free till Rs. 5 lakhs. The rebate under section 87A is not allowed to a Non-resident.
New tax Regime (FY 23-24)
| Income | Tax rates |
| Upto ₹ 3 lakh | 0% |
| ₹ 3 lakh – ₹ 6 lakh | 5% |
| ₹ 6 lakh – ₹ 9 lakh | 10% |
| ₹ 9 lakh – ₹ 12 lakh | 15% |
| ₹ 12 lakh – ₹ 15 lakh | 20% |
| More than ₹ 15 lakh | 30% |
You cannot claim any deduction under Section 80C, 80D, 80G, etc
In New tax regime, a maximum tax rebate under section 87A of ₹ 25,000 is available for income upto ₹ 7 lakhs meaning your income is totally tax free till ₹ 7 lakhs. The rebate under section 87A is not allowed to a Non-resident.
New tax Regime (FY 24-25)
Income | Tax Rate |
Upto ₹ 3 lakh | 0% |
₹ 3 lakh – ₹ 7 lakh | 5% |
₹ 7 lakh – ₹ 10 lakh | 10% |
₹ 10 lakh – ₹ 12 lakh | 15% |
₹ 12 lakh – ₹ 15 lakh | 20% |
Above ₹ 15 lakh | 30% |
You cannot claim any deduction under Section 80C, 80D, 80G, etc
In New tax regime, a maximum tax rebate under section 87A of ₹ 25,000 is available for income upto ₹ 7 lakhs meaning your income is totally tax free till ₹ 7 lakhs. The rebate under section 87A is not allowed to a Non-resident.
New tax Regime (FY 25-26)
| Income Range (₹) | Tax Rate |
|---|---|
| Upto ₹ 4 lakh | Nil |
| ₹ 4 lakh – ₹ 8 lakh | 5% |
| ₹ 8 lakh – ₹ 12 lakh | 10% |
| ₹ 12 lakh – ₹ 16 lakh | 15% |
| ₹ 20 lakh – ₹ 20 lakh | 20% |
| ₹ 20 lakh – ₹ 24 lakh | 25% |
| Above ₹ 24 lakh | 30% |
You cannot claim any deduction under Section 80C, 80D, 80G, etc
In New tax regime, a maximum tax rebate under section 87A of ₹ 60,000 is available for income upto ₹ 12 lakhs meaning your income is totally tax free till ₹ 12 lakhs. The rebate under section 87A is not allowed to a Non-resident.
Documents Required for ITR filing for Seafarers
Step-by-Step Guide for ITR filing for Seafarers
1. Registering on the Income Tax E-Filing Portal
Visit the Portal: Go to the official Income Tax Department e-filing website
New User Registration: If you are a first-time user, click on ‘Register Yourself’. Choose the ‘Individual’ category and enter your PAN, which will serve as your User ID.
Fill in Details: Provide your basic details, contact information, and create a password.
2. Choosing the Correct ITR Form (ITR-1 or ITR-2)
3. Filling Out Personal Details and Income Information
Select the Assessment Year: Choose the appropriate assessment year for which you are filing the return.
Income Details: Enter your income details under the appropriate heads:
Business Income
House property income
Capital Gains
4. Claiming Deductions and Exemptions
Deductions under Section 80C: Enter eligible deductions such as life insurance premiums, PPF, NSC, and tuition fees.
Deductions under Section 80D: Include premiums paid for health insurance.
Other Deductions: Claim deductions under other sections like 80E for education loan interest, 80G for donations, etc.
5. Verifying and Submitting the Return
Tax Payment: If there is any tax payable, pay it through the e-filing portal using net banking or other available options.
Preview and Submit: Preview the completed ITR form, ensure all details are correct, and click ‘Submit’.
Verification: After submission, verify your ITR within 30 days of filing. You can e-verify using methods such as Aadhaar OTP, net banking, or through a digital signature. Alternatively, you can send a physical signed copy of ITR-V to the Centralized Processing Center (CPC).
What is the Due date of ITR filing for Seafarers?
The Due date to file Income tax return for Seafarers is 31st July.
In case you have missed this deadline then you can file belated ITR till 31st December with late fees.
Also for any mistake made while filing ITR before 31st July, you can make corrections by filing Revised ITR any number of times till 31st December.
If you miss deadline of Belated income tax return filing then you can file Updated ITR till 2 years from the end of relevant assessment year with late fees and additional taxes.
What are the Consequences of non-payment of Tax and non-filing of ITR by Seafarers?
Failing to pay taxes and file your Income Tax Return (ITR) has severe consequences. Firstly, unreported income is deemed illegal, equating to tax evasion, and can result in a penalty of 100% to 300% of the evaded tax under Section 271(C). Secondly, a penalty ranging from 10% to 90% of the undisclosed amount may be imposed under Section 271AAB, depending on the circumstances. Lastly, if you miss the filing deadline, a 1% interest per month or part thereof will be charged on the unpaid tax amount as per Section 234A.
Looking for help?
At A R Dhorajiya & Co., we specialize in income tax return filing for seafarers. From choosing the right ITR form to optimizing deductions, we ensure complete compliance with minimal effort on your part.
Contact us today at +91 9769647582 for a consultation or to get started with your ITR filing
Frequently Asked Questions
Seafarers usually file ITR-1 if they qualify as residents and have income only from salary and interest. If they are NRIs or have foreign income or assets, ITR-2 will be applicable.
If a seafarer qualifies as a non-resident (NRI) and their salary is received outside India in a foreign account, it is not taxable in India. But if the salary is credited in an Indian bank account or they are residents, it may be taxable.
First, determine your residential status. If you are a resident, global income is taxable in India. If you’re an NRI, only income earned or received in India is taxable. Based on that, apply the relevant tax slabs.
Seafarers are considered NRI if they stay outside India for 182 days or more during the financial year while on duty outside Indian waters. This is based on their Continuous Discharge Certificate (CDC) and passport entries.
Yes, a seafarer can take up self-employment when not on ship duty. However, such income will be taxable in India and should be declared under the head “Income from Business or Profession.”
If you fail to declare your correct residential status and avoid taxes, the Income Tax Department may levy penalties, interest, and initiate legal proceedings for misreporting of income.
NRI days are calculated based on the date of departure from India to join duty and date of return as per passport stamps and CDC entries. Days spent outside Indian territorial waters are counted as NRI days.
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