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 2019 and went for your exams and then joined back on suppose 1 Jan 2020, then you will be unable to complete the required 182 days and your earnings between 1 Jan 2019 to 31 Mar 2019 will be taxable as per Indian tax law for the financial year 2019-2020. Suppose, you earned 7.5 Lac Rupees during this period, then your tax will be 7.5 lac-2.5 lac= 4.5 lac. Now 10% of 4.5 lac= 45000 INR. Of course there are ways to reduce this amount. For that you will have to consult a qualified CA.
Note: In the new budget, new reforms were made for the NRI statuses, but for the sailor it is still the same if we look in to the clauses and sections.
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.
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.