13 October 2009
Sir,Please advise where and under which section it has been mentioned in Income Tax Act that a salary of merchant navy sailor earned in US Dollers as an NRI status remitted to his NRE A/c maintained in India is exempt from Income Tax in India also suggest whether he should file his return of Income with IT Deptt.
I have replied you earlier that his salary wont be taxable in India and he need not require to file Return of Income.
Section 5 sub section 2 provides following
(2) Subject to the provisions of this Act, the total income of any previous year of a person who is a non-resident includes all income from whatever source derived whichâ€”
(a) is received or is deemed to be received in India in such year by or on behalf of such person ; or
(b) accrues or arises or is deemed to accrue or arise to him in India during such year.
Explanation 1.â€”Income accruing or arising outside India shall not be deemed to be received in India within the meaning of this section by reason only of the fact that it is taken into account in a balance sheet prepared in India.
Explanation 2.â€”For the removal of doubts, it is hereby declared that income which has been included in the total income of a person on the basis that it has accrued or arisen or is deemed to have accrued or arisen to him shall not again be so included on the basis that it is received or deemed to be received by him in India.
Further I am explaining Section 139 in simple terms. It provides for liability of Filing Return of Income by a person (individual) if he is having taxable Income of more than Rs. 160k. As in your case, the salary wont come under the scope of IT Act in India and wont included in your taxable Income.