Nri

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Querist : Anonymous

Querist : Anonymous (Querist)

10 November 2013 My friend is a NRI in a Merchant Navy. He has been pulled up for receiving his money in India. He has stayed for more than 187 days outside India in the the ship as per his CDC. As far as I know there is no clause for money received in India. The Commissioner is asking for a case history in which a verdict has been given for money received in India.

Nikhil Kaushik

Nikhil Kaushik (Expert)

10 November 2013 is he receiving salary in India or the employer remitting the salary to his NRE account?

Querist : Anonymous

Querist : Anonymous (Querist)

10 November 2013 The Employer is remitting his salary into his NRE Account. He is onboard a foreign ship.

Nikhil Kaushik

Nikhil Kaushik (Expert)

10 November 2013 i believe your friend erred in filing his/her Indian tax return. If his status is NRI and he is receiving money in NRE account, there is no need of mentioning that salary in the tax return even in exempt income. Nevertheless, the basic rules of the act provide for the same to be held non-taxable. So, be doubly sure about the number of days spent outside India during the year.

AOs often take impractical stands during the assessment. So it would be advisable that your friend submit all the required documents such as copy of Passport to bring all the facts on record. This would help if the AO doesn't agree to your position and where you appeal to CIT(A) against the AO's order.

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Querist : Anonymous

Querist : Anonymous (Querist)

10 November 2013 The case is lying with the CIT now. He himself is taking this impractical stand. All documents have been provided to him like Passport, CDC, Bank details. He has agreed with the NRI status. He is saying that since income has been received in India it is taxable. He is asking for previous cases where CIT or Court has given a verdict pertaining to such an issue so as to nullify the case.

CA. Anuj Gupta

CA. Anuj Gupta (Expert)

10 November 2013 CIT is partially correct as section 5 covers cases in which income is received or deemed to be received in India , which is the fact of your case.

However section 5 is to be read with section 9 which provides for taxation of salary which has been rendered in India .

Anuj
femaquery@gmail.com

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