Sailors Doubts About NRI Status, Tax and Financial Investments-Answered

Since we seafarers are entitled to NRI status, we should be aware of the financial liberties and limitations that we have as a NRI, what our law allow us and what is illegal, this information can also be used to make wise investment decisions.

Let’s have a look at frequently asked questions and their answers in very plain and easy to understand language.

Doubts About NRI Status

Here get to know the answers of all your Doubts About NRI Status:

Q) When I will Be Entitled for a NRI status?

A) This is the very first question which arises in the minds of young sailors, and to worsen the situation one gets so many different views on this question that it only confuses the young sailor. Let me put it in very simple words for your easy understanding.
One is entitled to NRI status if s/he has been away from India i.e. from date of embarkation for more than 182 days. This applies to both foreign flag ships as well as Indian flag ships.

Q) Is my Income Totally Tax Free?

A) Your income will be totally tax free only when you have acquired the NRI status for a financial year, a financial year starts from 1-Apr of a year and ends on 31-Mar of next year. To put it in simple and understandable words, if you have been onboard for 182 days or more between 1 April of a year to 31 March of next year, your income will be totally tax free, in that case you will have to file only a zero return.

Q) What if I am unable to attain NRI status for a Financial Year?

A) In case you are unable to complete 182 days or more onboard or away from India during a financial year, for example you signed off in Jan 2014 and went for your exams and then joined back on suppose 1 Jan 2015, then you will be unable to complete the required 182 days and your earnings between 1 Jan 2015 to 31 Mar 2015 will be taxable as per Indian tax law for the financial year 2014-2015. Suppose, you earned 4 Lac Rupees during this period, then your tax will be 4 lac-2.5 lac= 1.5 lac. Now 10% of 1.5 lac= 15000 INR. Of course there are ways to reduce this amount. For that you will have to consult a qualified CA.

Q) What types of Account can be opened by a NRI (read sailor)?

A) Following type of accounts can be opened by a NRI:
     a) Non Resident Ordinary Account, NRO: In this type of account, account should be denominated in Indian Rupees.
Sailors Financial Planning, Doubts About NRI Status
     b) Non Resident (External) Rupee Account, NRE: In this type of account, account can be  denominated in any currency as determined during opening the bank account but it will be maintained in Indian Rupees. This is the most common type of account that a seafarer uses.
     c) Foreign Currency Non Resident (Bank)
Account, FCNR(B)
: This type of account can be held in any freely convertible currency. This type of account is only available in the form of term deposits for 1 to 5 years. To keep it simple, the most common type of account that seafarer uses is the NRE account.

Q) Can I open a normal Saving Bank Account?

A) If you are enjoying the benefits of a NRI, please note that as per the RBI (Reserve Bank Of India) guidelines you are not permitted to open a Small Saving Bank Account.

Q) Can I invest in PPF(Public Provident Fund)?

A) If you are enjoying the benefits of a NRI then as per RBI guidelines you are not permitted to invest in PPF.

Q) As a NRI, can I Purchase Immovable Property in India?

A) Yes, an NRI can purchase an immovable property in India other than any agricultural land or a farm house.

Q) As a NRI, where can I Invest?

One can invest in the following as per RBI guidelines:
Domestic Mutual Funds.
Money Market Mutual Funds.
Govt. Dated Securities/ Treasury Bills. Bonds issued by a PSU in India.
National Plan/ Saving Certificate
Non convertible debentures of a company incorporated in India
Shares and convertible debentures of Indian companies through stock exchange under
Portfolio Investment Scheme
Shares and convertible debentures of Indian companies under the FDI scheme (including automatic route & FIPB)
Shares in Public Sector Enterprises being dis-invested by the Government of India
I hope that most of your question would have been answered, if you still have any doubts regarding above, don’t hesitate to leave a comment, we will definitely try to help. This was all from this post on Sailors Queries, Doubts About NRI Status.

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18 thoughts on “Sailors Doubts About NRI Status, Tax and Financial Investments-Answered

  • August 8, 2015 at 11:37 am
    Permalink

    182 days has been changed to 186 …. not 100% sure but 70% yes I m sure

    Reply
    • August 22, 2015 at 8:42 am
      Permalink

      Rohit thank you very much for your comment, but we just checked it and it is still 182 days.

      Reply
      • July 1, 2016 at 7:18 pm
        Permalink

        I went through your article and want to point out that you are incorrect as to the number of days required outside India to attain NRI status. Eg even if one is out of India for 183 days in a year, he will be IN India for 182 days and hence a resident Indian as per section6 of IT Act.

        Reply
  • October 6, 2015 at 8:33 am
    Permalink

    i am a cadet in merchant navy.but for the last 1 year i haven’t sailed but i have CDC.for getting NRI status,i had to sail
    for 180 days in a financial year.can i open trading and demat account in resident status.
    i am maintaning a normal saving account and havent recieved any salary
    for last 1 year.
    so,what will happen if i again join ship.then my NRI status will change every year.if i sail for 180 days in a financial year,i am NRI and i dont have to pay tax.otherwise i am not NRI.if i open a trading and demat account with zerodha,what will happen when my residential status changes.
    please provide a seperate article for those who works in merchant navy,since its really confusing.a lot of my friends are also interested in investing but we are unable to understand the rules and regulations,since alternate years,we may be resident indian or NRI.
    thank you

    Reply
  • March 13, 2016 at 11:59 pm
    Permalink

    Sir I am a marine engineer and I have only 181 days for nre status and shortfall of 3 days in this financial year 2015_16. If I make a trip to Sri Lanka for remaining 3 days Wil I eligible for nre status.

    Reply
  • April 29, 2016 at 8:27 am
    Permalink

    Sir i am a 4th engineer and i have opened a PPF account last year in april month, I sailed from August 2015 to March 2016 completing more than 190 days, Will it be a problem to my PPF account if a file for NRI for accounting year 2015-2016.

    Reply
  • July 19, 2016 at 6:39 pm
    Permalink

    sir iam a chief engineer and i could not able to complete my nri status for year 2015-2016 as i met with an accident on board.do i have any exemption for not paying tax.

    Reply
  • July 28, 2016 at 1:41 pm
    Permalink

    A merchant navy officer’s Salary comes under which section of exempted income? Also while filing Nil Tax return where in the form should one state this section (for exempted income)?
    Circumstances being
    1. Amount remitted by his company which is based outside India in his NRE Account.
    2. Sailing on foreign flag ships and completing more than 182 days on ships.

    Reply
  • September 15, 2016 at 9:14 am
    Permalink

    Sir I am working in foreign shipping company since last ten years. I put my salary in NRE account. Since 2010-2011 I file IT returns. Income tax authorities send me a letter mentioning that for assessment year 2014-2015 I put tax relief under section 90/90A which is invalid for seaman. I stay more than 182 days out of India. I showed my passport entries and Indian CDC to Income tax officials but they are asking me to pay tax on my salary earning of NRE account. Please advised me.

    Reply
  • October 8, 2016 at 11:50 pm
    Permalink

    hello sir. i am working on foreign flag ship. i completed my 175 days out side india and i signed off from ship and came to india. now i short fall for 8 days to complete my NRE status. Now is it possible to complete these 183 days by visiting country by tourist visa? or only employment days are considered in NRE days?

    Reply
  • November 8, 2016 at 10:23 am
    Permalink

    Can u advice seaferer CA in Chennai

    Reply
  • November 16, 2016 at 6:26 am
    Permalink

    i am sailing in one shipping company and i completed 150 days , now if i change my company and complete my remainning 34 days in another foreign shipping company , will i be entitled to receive my NRI returns , and if yes then wats the procedure to get my paid tax back…

    Reply
  • November 28, 2016 at 4:02 am
    Permalink

    hello Sir
    I am working on foreign flag ship and have completed my 180 days out side India (including 3 days travel after Immigration) and signed off from ship and came to India, Can you Please advise, is it possible to complete these 183 days by visiting outside country by tourist visa ? or only employment days are considered in NRE days? And Also for seafarer NRI days counted as per Passport dates (Immigration date ) or CDC date (Date of Sign Off/Sign On) ?
    Thankyou for your reply.

    Reply
  • December 3, 2016 at 7:01 am
    Permalink

    Sir, if any one completed 7 consecutive years of his nri status(182)as a sea man and taken tax benefit. But in this financial year have not completed nri status.Is their any provision to get a incom tax relaxation on this year on behalf of last 7 year.p ka confirm

    Reply
  • December 3, 2016 at 7:05 am
    Permalink

    Sir, if any one completed 7 consecutive years of his nri status(182)as a sea man and taken tax benefit. But in this financial year have not completed nri status.Is their any provision to get a incom tax relaxation on this year on behalf of last 7 year.p ka confirm

    Reply
  • February 11, 2017 at 6:57 am
    Permalink

    Sir,I am fourth engineer in a shipping in a shipping company.From my bank I got a mail regarding self certification form of tax residency.I have a nre account. In tax resident column which country I should put.

    Reply
  • March 7, 2017 at 1:47 pm
    Permalink

    Sir, I have some NRE FD in IOB. If I stop sailing, not maintaning NRE status, what will happen to my NRE FD. The income from NRE FD is not taxable. How long I can keep this as NRE FD after stop sailing?

    Reply
  • July 27, 2017 at 4:54 am
    Permalink

    Hi, if a sailor retires say in this financial year 2017-2018 what happens to his nre status and his nre fds. He has maintained nre status for more than 20 years. How does he informs banks about his changed status and file for taxes. If we do not break our nre fds prematurely what will happen to the intrest income earned on them if hes not an nri. Will they be taxed or will they be exempt untill maturity.

    Reply

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