Income Tax for Seafarers: NRI Status, the 182-Day Rule, CDC Dates and What Is Taxable

For an Indian seafarer, tax turns on one number: the days spent in India in the financial year. Below 182, you are a non-resident and salary earned on a foreign ship is not taxed in India. At 182 or above, you are resident — and for most, that puts the ship salary into Indian tax for the year.

The rule sounds simple. The counting is where seafarers go wrong: days away are not the same as days not in India, the CDC rule is narrower than most people think, and Indian income above ₹15 lakh changes the line altogether. This guide sets out how the count works for FY 2025-26 (the return being filed now, under the Income-tax Act 1961) and tax year 2026-27 onward (under the Income-tax Act 2025, which kept the same tests).

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The test: fewer than 182 days in India

An individual is resident in India for a financial year if in India for:

1. 182 days or more in the year, or
2. 60 days or more in the year and 365 days or more in the four preceding years.

The second test is what catches most people who live abroad. It does not apply to a seafarer. An Indian citizen who leaves India for employment outside India, or as a member of the crew of an Indian ship, is tested on the 182-day line alone. A citizen who lives abroad and comes on a visit gets the same 182-day line — unless their Indian income exceeds ₹15 lakh (see below).

Rule	1961 Act (FY 2025-26)	2025 Act (2026-27 on)
Basic tests	6(1)(a) and (c)	6(2)(a) and (b)
182 days only, for crew and employment abroad	Expl. 1(a) to 6(1)	6(3)
CDC rule for voyages	Expl. 2 to 6(1), Rule 126	6(6), Rule 8 (2026 Rules)
₹15 lakh: 120 days for visitors	Expl. 1(b) to 6(1)	6(4)–(5)
Deemed residence	6(1A)	6(7)
Not ordinarily resident	6(6)	6(13)

184 days outside India, not 182

This is the most common mistake. The test counts days in India. In a 365-day year, 182 days at sea leaves 183 days in India — resident. To stay under the line you need at least 184 days outside India, or 185 in a leap year (FY 2027-28 has 29 February 2028).

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Counting the days

Ship contracts that start or end at an Indian port: the CDC rule

For a voyage by a ship carrying passengers or freight in international traffic that starts at an Indian port and goes to a port outside India, or starts outside India and ends at an Indian port, the period from the sign-on date entered in your Continuous Discharge Certificate to the sign-off date is excluded from your days in India — even the days the ship spends in Indian ports or waters. Both the sign-on and the sign-off day are excluded.

That rule is Rule 126 of the Income-tax Rules 1962 for FY 2025-26, and Rule 8 of the Income-tax Rules 2026 from tax year 2026-27, in the same terms.

Contracts joined abroad: your passport decides

The CDC rule does not help, and is not needed, when you fly out to join a ship in Singapore or Rotterdam. You are physically outside India from the day you fly out until the day you land. Count from your passport stamps.

The travel days

• The day you leave India counts as a day in India.
• The day you return is also counted as a day in India by the department. Some tribunals have held that the arrival day should be excluded, but that is an argument for an appeal, not a basis for planning a contract. Count both.

Worked example 1: two contracts, comfortably non-resident

A second officer, FY 2026-27 (365 days):

Period	Dates	Days outside
Joins a ship abroad (passport)	18 Apr – 2 Sep 2026	136
Mundra–Mundra voyage (CDC)	5 Nov 2026 – 20 Feb 2027	108
Total		244

The passport period counts 19 April to 1 September — both travel days are days in India. The CDC period counts every day from sign-on to sign-off, both included. Days in India: 365 − 244 = 121. Non-resident, with 60 days to spare.

Worked example 2: six months away, and still resident

An engineer flies out on 1 July 2026 and returns on 28 December 2026 — a six-month contract. Days outside India, counting both travel days as days in India: 179. Days in India: 186. Resident, unless the engineer leaves India again by 26 March 2027 and stays out until 31 March.

Nothing about that contract felt marginal. The difference between “six months away” and the 184 days actually needed is exactly the kind of gap that a delayed sign-on opens up — and it is only fixable while the year is still running.

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When Indian income exceeds ₹15 lakh

Two rules apply only where your income from Indian sources — rent, NRO interest, capital gains on Indian property or shares — is more than ₹15 lakh in the year. Salary earned on a foreign ship for work outside India is income from a foreign source and does not count towards the ₹15 lakh.

1. The 120-day line for visitors. A citizen living abroad who comes on a visit is resident at 120 days (instead of 182) if they have also spent 365 days or more in India in the four preceding years. Most seafarers have. A seafarer resident under this rule is not ordinarily resident if in India for less than 182 days.
2. Deemed residence. A citizen who is not liable to tax in any other country by reason of domicile or residence — true of most seafarers, since no country taxes them on a ship — is deemed resident if their Indian income exceeds ₹15 lakh, regardless of days — and is also not ordinarily resident.

Not ordinarily resident is a much better place than resident: income that arises and is received outside India (other than from a business controlled or a profession set up in India) is still not taxed. But income received in India is taxable — and CBDT Circular 13/2017, which protects ship salary credited to an NRE account, is written for non-residents. Where the salary is paid, the return, and the bank accounts all need attention, and the status has to be claimed correctly.

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What is taxable once the status is known

Income	Non-resident	Ordinarily resident
Foreign-ship salary	Not taxable	Taxable
NRE interest	Exempt	Exempt only while FEMA-NR
NRO interest	Taxable (TDS 30% + cess)	Taxable
Indian rent, capital gains	Taxable	Taxable

Foreign-ship salary means salary for work on a foreign ship outside India; it stays untaxed for a non-resident even when credited to an NRE account. NRE interest is exempt only while FEMA treats you as a person resident outside India — the FEMA test is explained below.

Circular 13/2017, issued on 11 April 2017, clarified that salary accruing to a non-resident seafarer for services rendered outside India on a foreign ship is not included in the seafarer’s total income merely because it is credited to an NRE account with an Indian bank. The Calcutta High Court reached the same conclusion. The circular is limited to foreign ships; salary on an Indian-flagged ship needs separate examination.

Two things that surprise non-residents:

• No ₹12 lakh rebate. The Section 87A rebate is for residents only. A non-resident with ₹6 lakh of NRO interest pays tax on it, even though a resident with the same income would pay nothing.
• TDS on NRO interest is deducted at 30% plus cess (under Section 195 of the 1961 Act; Section 393(2) of the 2025 Act from 1 April 2026), whatever your actual tax. The excess comes back only through a return.

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Which return, and whether you must file

• ITR-2 for a non-resident with salary, interest, capital gains or house property; ITR-3 if there is business or F&O income. ITR-1 is not available to non-residents.
• Must you file? If your only income is foreign-ship salary in an NRE account and NRE interest, there may be no taxable Indian income, and filing may not be compulsory. If Indian income exceeds the basic exemption limit, or you want TDS refunded, you must file.
• We recommend filing every year anyway. The return records your status, year by year, on the department’s own system. It is the first document a bank, a visa officer or a home-loan lender asks for, and a seafarer with filed returns and a day-count on file is far easier to defend if a status question is ever raised.

The return for FY 2025-26 can still be filed as a belated return until 31 December 2026. If that date passes, see missed ITR deadline: belated vs updated return.

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The evidence to keep

Status disputes are decided on documents, not on recollection. For every year, keep:

• CDC pages showing each sign-on and sign-off;
• passport pages with every Indian entry and exit stamp (and the e-passport travel history if stamps are missing);
• contracts or sign-on letters, and sign-off or discharge papers;
• wage slips and the NRE credits that match them;
• the ship’s flag and voyage ports for any contract you count under the CDC rule.

Scan them as you go. Reconstructing three years of contracts after a notice arrives is slow, and gaps get resolved against you.

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FEMA: a separate test for your bank accounts

Tax status and FEMA status are decided differently. Under FEMA, a person who goes abroad for employment is a person resident outside India from departure — a test of purpose, not of days in the current year. A seafarer employed on a foreign ship generally falls in that category, which means:

• foreign earnings should go to an NRE account (freely repatriable, interest exempt while you are non-resident);
• resident savings accounts should be redesignated as NRO — many seafarers never do this;
• when you come ashore for good, NRE accounts must be redesignated as resident accounts or moved to an RFC account; FCNR deposits can run to maturity.

The two statuses can diverge — a non-resident for tax with a resident savings account, or the reverse in the year you come ashore. We review both together; the detail is in FEMA for seafarers.

Coming ashore for good

In the year you return, your status still depends on the count. After that, you may be resident but not ordinarily resident — with foreign income received outside India still outside Indian tax — if you were non-resident in nine of the ten preceding years, or in India for 729 days or less in the seven preceding years. For a seafarer with a long career at sea, the nine-of-ten test usually gives the first one or two years after return. The timing of the last sign-off, the final wages and the accounts is set out in our guide to coming ashore for good.

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How we help seafarers

Every seafarer on our annual seafarer plan has a live day tracker that we maintain from their CDC and passport entries. Before each contract we tell them the latest date they can sign on and stay non-resident; after 31 March we file the return on the status the evidence supports, recover TDS on NRO interest, and review their bank accounts under FEMA. All of it is done remotely, over WhatsApp and email, wherever they are sailing.

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Frequently Asked Questions

How many days does a seafarer need outside India to be an NRI?

At least 184 days in a 365-day financial year, and 185 in a leap year. The test is fewer than 182 days in India, so 182 days at sea is not enough — it leaves 183 days in India.

Is the CDC period always excluded from days in India?

Only for an eligible voyage — a ship carrying passengers or freight in international traffic on a voyage that starts or ends at an Indian port. For those, the whole period from the CDC sign-on date to the sign-off date is excluded. If you join a ship abroad, count your days outside India from your passport stamps.

Is seafarer salary credited to an NRE account taxable in India?

Not for a non-resident working on a foreign ship. CBDT Circular 13/2017 clarifies that salary accruing to a non-resident seafarer for services outside India on a foreign ship is not taxable in India merely because it is credited to an NRE account. If the seafarer is resident and ordinarily resident for the year, the salary is taxable.

Does the ₹15 lakh rule apply to seafarers?

Only if income from Indian sources — rent, NRO interest, capital gains — exceeds ₹15 lakh. Foreign-ship salary does not count. Above ₹15 lakh, a visiting citizen can be resident at 120 days, and a citizen not taxed in any other country is deemed resident; in both cases the status is resident but not ordinarily resident.

Which ITR form should a seafarer file?

ITR-2 for a non-resident with salary, interest, capital gains or house property income; ITR-3 if there is business or F&O income. ITR-1 cannot be used by a non-resident.

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Related reading

• Seafarer NRI days calculator
• Seafarer income tax and NRI status — our annual plan
• FEMA for seafarers: NRE, NRO and FCNR accounts
• Income-tax notice questioning a seafarer’s NRI status
• Seafarer coming ashore for good: RNOR, accounts and timing
• NRI ITR filing: residential status, DTAA and Schedule FA
• Income-tax Act 2025: old to new section map
• NRI selling property in Punjab: tax, TDS and repatriation