Respected Sir/Madame,
With respect to recent verdict in Calcutta High Court in January 2017 about "taxability of Income by seafarer" is not taxable in India . Myself, seafarers and even some of my friends are confused about the tax filing system. I request all highly qualified and practicing CAs to shed light on this matter.
Reference: https://www.moneylife.in/article/income-earned-by-seafarer-overseas-is-not-taxable-in-india-calcutta-high-court/49366.H T M L
Here is the case study of my mariner colleague and the queries* which he/she also forwarded to grievance cell of Income Tax department.
" I am a marine officer employed on foreign flagged vessel. (NRI time not complete)
My grievance is,
I earned gross income of US$ 5700 in Financial year 2016-2017 from foreign company while being employed on foreign flagged vessel. in 4 months.
Out of this income, I have remitted Rs. 2,20,000 into my NRE account. and remaining amount of 1200 USD I brought in cash with me. Airport customs told that the amount is small, so no need to declare. I have invested in mutual funds INR 35,000
Clearly I am not an NRI for this FY 2016-2017. But I am planning to join ship in august 2017 till February 2018. Which will make me NRI for assessment year 2017-2018. Will it, or it will make me eligible for tax refund!??
So, for this 31st july 2017 deadline,
1) Should I Fill ITR 1? ( If yes , Ok. If no then which one as my income was from "salary out of India")
2) In form ITR 1, what should I fill in (row B1) "INCOME FROM SALARY"? should I write 2,20,000 or convert 5700USD to INR? If converting 5700 to inr, how do I obtain conversion rate?
3) All other rows are going to be blank except 80TTA for saving account. I have 2 accounts, 1 is NRE and other is saving account. interest in NRE is not taxed. So I will fill only 'total Interest' from saving account. If I am wrong correct me.
4) remaining all pages are going to be empty in my case, ie no (TDS1, TDS 2 , TCS, Sch IT)
5) So under (D13 iv. Others) tab "Nature of income" amount is given. If I achieve NRI status, Let's say for FY 2017-18, am I supposed to fill my income in INR or USD here, or tell my CA to attest the salary statement stating "0 INR taxable" ?
6) Or skip entire process and not file at all. ( Max penalty for not filing this year can go upto 5000INR. his/her rough Income tax is coming out to be only INR 1500) "
*All these numerical values are changed to different values for case study purpose and edited by me.
His/her income in remittance is 2,20,000 Which is below tax slab of 2,50,000. But gross income 5700$ X 65 = 3,70,500INR will be taxable.
If I am to face such situations, what will be the best course of action?
Thank You
CAclubindia
