Marine engineers, deck officers, ratings and other merchant navy professionals spend most of the year at sea, often on foreign-flag ships. Because of this, their income tax rules are different from those of a regular salaried person in India. The most important question is your residential status — it decides whether your ship salary is taxable in India at all.
Step 1: Find your residential status
For an Indian citizen who leaves India for employment, or as a crew member of a ship, the simple test is:
- Resident: you stayed in India for 182 days or more in the financial year
- Non-Resident (NRI): you stayed in India for less than 182 days
The usual “60 days + 365 days in four years” test does not apply to Indian citizens leaving India for employment or as crew members. The same position continues under the new Income-tax Act, 2025, which came into force on 1 April 2026.
Step 2: Count your days correctly (CDC rule)
For seafarers on an eligible voyage (a ship carrying passengers or cargo in international traffic, sailing from India to a foreign port or vice versa), the days between the sign-on date and sign-off date entered in your Continuous Discharge Certificate (CDC) are treated as days outside India — even if the ship was in Indian waters for part of that time.
Keep these ready to calculate your days:
- Passport with immigration stamps
- CDC with sign-on and sign-off entries
- Contract / articles of agreement with the shipping company
Step 3: Is your ship salary taxable?
| Your status | Salary for work on ship outside India |
|---|---|
| NRI | Not taxable in India (CBDT Circular 13/2017 clarifies that salary of a non-resident seafarer for services on a foreign ship, credited to an NRE account, is not taxable) |
| Resident | Taxable in India, like any other salary |
If you are an NRI, ask your employer to credit salary directly to your NRE account.
What income is still taxable in India for NRI seafarers?
- Interest on NRO savings and NRO fixed deposits (TDS is usually deducted at a higher rate)
- Rent from property in India
- Capital gains on sale of shares, mutual funds or property in India
- Any salary for days worked on an Indian coastal (domestic) voyage
Interest on NRE savings and NRE FDs is tax-free for NRIs.
Should an NRI seafarer file an ITR?
Even when your ship salary is not taxable, filing an ITR is strongly recommended:
- To claim refund of TDS deducted on NRO interest or other income
- To keep proof of NRI status and income for home loans, visas and immigration
- To carry forward capital losses
- To respond confidently if the department sends a notice about high-value NRE deposits
NRIs cannot use ITR-1. Most seafarers file ITR-2. The due date is normally 31 July after the financial year ends.
Common mistakes seafarers make
- Counting days from passport stamps only and ignoring CDC dates
- Salary credited to a savings (resident) account instead of an NRE account
- Not updating bank KYC to NRI status
- Showing NRE salary as taxable income by mistake in the ITR
- Not filing a return at all and losing TDS refunds
Specialised tax help for marine professionals
PUCHO Business Consult works with marine engineers, officers and crew to calculate residential status, file ITR-2, claim refunds and reply to notices. Book a free consultation or call +91 97486 86502.
*This article is for general information. Your exact tax position depends on your sailing days, contracts and income — please consult us before filing.*