Seafarers work on vessels such as ships, handling navigation, operations, or maintenance under contractual agreements. Their income tax filing process in India differs based on their residential status under the Income Tax Act, 1961:

• Resident & Ordinary Resident (ROR): If a seafarer stays in India for 182 days or more during a financial year, their global income is taxable in India.
• Non-Resident (NR): If their stay in India is less than 182 days, their foreign income, including ship salary, is not taxable in India.
• Not Ordinarily Resident (NOR): In specific cases, a seafarer may qualify as NOR, where certain global income remains exempt under predefined conditions.

The 120-Day Rule and Its Impact

The Union Budget 2020 introduced a 120-day rule applicable to Indian citizens whose taxable Indian income (excluding ship salary) exceeds ₹15 lakh. Key points:

• If a seafarer’s Indian taxable income is below ₹15 lakh, the 182-day rule remains applicable.
• If a seafarer’s Indian taxable income exceeds ₹15 lakh, the 120-day rule may classify them as a Resident but likely as NOR, ensuring ship income remains exempt.

CBDT Circular 13/2017: Key Exemption

As per CBDT Circular 13/2017, salary earned on foreign ships and deposited into an NRE account is treated as received outside India, making it non-taxable in India. To avail of this benefit, ensure that your salary is credited to your NRE account.

Residential Status Calculation: Rule 126

A seafarer’s stay outside India is determined using their Continuous Discharge Certificate (CDC). The period between sign-on and sign-off dates on an eligible voyage is excluded from the stay calculation, ensuring accurate residential status classification.

Bank Account Guidelines

Seafarers classified as Non-Residents (NR) should maintain only NRO and NRE accounts in India.

Why File an ITR Even If Your Income Is Exempt?

Filing an Income Tax Return (ITR) is beneficial even if your income is exempt because:

• It serves as a financial record for future transactions.
• It is useful for visa applications, loans, or financial planning.
• It ensures compliance and avoids unnecessary queries from tax authorities.
• Exempt salary from foreign ships credited to NRE accounts should be reported under Exempt Income in the ITR.
• Interest earned on NRE accounts is exempt under Section 10(4)(ii) but must be disclosed in the ITR.
• Additional income from capital gains, rent, or dividends from India is taxable and must be reported under the appropriate tax heads.

Importance of Record Maintenance

Maintaining bank statements, CDC details, and investment summaries is crucial. Large exemptions in ITRs may attract scrutiny from the Income Tax Department, making proper documentation essential.

If a resident is making payment to anon-resident, then he shall deduct withholding tax at the prescribed rate. But sometimes, the income tax applicable for that nonresident on such income is less than the applicable withholding tax rate, in that case, that NRI can request income tax authorities to issue lower/NIL TDS deduction certificate depending on his case to save himself from the hardship of higher rate of TDS.

In case of a nonresident who sells an immovable property (held for long term) in India, the buyer is liable to deduct withholding tax at the rate of 20% (plus edu cess, surcharge etc.) on sale consideration. To recover the refund of extra TDS deducted, nonresident seller, shall file his tax return in India which he can do only after the end of the financial year. It may take months/years to complete the process and in getting the refund. To avoid this hassle, a person can apply for lower or nil TDS deduction certificate for NRI to income tax authorities depending on his case. Now, this facility is available online. By availing this facility, nonresidents can avoid deduction of huge withholding tax.

Not exactly, He can authorize anyone on his behalf and get it finished from his country of current residence. You can authorize NRI CA Services to take care of end-to-end TDS proceedings.

To obtain NIL or No TDS Certificate, a calculation need to be submitted along other documents to satisfy Assessing officer that there is no capital gain is emerging from the assigned property sale.

Nonresidents or foreign companiesdoing business in India should have the incorporation of a company/a branch/liaison office in India. To incorporate a private limited company in India, there shall be atleast two directors and two shareholders in a company. Shareholders and directors can be the same persons, but at least one of them shall be an Indian resident. The incorporation process can be done by filing applicable forms to Ministry of Corporate Affairs of India(MCA) which involves obtaining PAN, TAN, DSC, DIN, registering Memorandum of Association (MOA) and Articles of Association (AOA) etc.

A branch office or liaison office in India of a foreign entity can be established by taking the following requirements into consideration:

Time Period: It usually takes 45 days to register an LO / BO. Validity for setting up of Liaison Office for companies in the business of construction & development and Non-Banking Finance Companies (NBFCs) has been fixed for two years. The validity of establishing LO in rest all of the cases is for 3 years. Renewal is necessary after 3 years. However, in the case of BO, renewal of registration is usually not needed, but in some cases, RBI approves for 2-3 years and renewal is required to post that.

The validity of Approval: After the approval, LO/BO shall set the office inside six months. The authorization shall elapse; in case the office is not set up in six months. Companies seeming for any additional extension of time shall require prior approval of RBI.

A foreign company having any kind of income in India, through its permanent establishment in India or otherwise, shall do filing corporate tax in India. You must be wondering what is foreign company? The incorporation of company in India from outside is called a foreign company.

In the past, foreign companies preferred not to file a tax return in India as taxes were already withheld on their income. But recently Income Tax Authorities have started issuing non-compliance notices to foreign companies. Thus, now it is preferable for a foreign entity to file its tax return in India even if its only income in India is due technical or consultancy services or royalty, on which taxes are already withheld.

For A.Y 2020-21, the tax rate applicable on foreign companies in India is 40%. In a few exceptional cases, the tax rate applicable is 50%.

In addition, education cess of 4% on tax calculated as above on foreign company in India will be applicable in all cases.

If a foreign company is providing technical services in India without having any permanent establishment in India, then the tax rate applicable on it is 10%+ surcharges (if exceeds the specified limit) + edu cess.

The taxation on foreign companies in India is filed after the end of the financial year in which income is earned. It means for income earned in the financial year starting from 1st Apr 2019 to 31st Mar 2020; the tax return can be filed after 1st Apr 2020. In other words, to report income earned in F.Y 2019-20, we can file a tax return in the Year 2020-21, which is also called assessment year (A.Y). The last date of corporates tax return filing without any late filing penalty is 30th Sept of the relevant assessment year.

For F.Y 2019-20, i.e. A.Y 2020-21, the due date for corporate tax filing is extended to 31st Oct 2020 considering hardships due to current covid-19 crisis.

If a person gets GST registration, he has to file various GST returns mandatorily irrespective of profitability or sales during the year. This GST return filing online is filed monthly, quarterly, or annually depending on the type of business. According to GST law, ‘non-resident taxable person’ is any person who occasionally undertakes transactions involving the supply of goods or services, or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India. Every nonresident individual has to get GST registration mandatorily and shall file GST returns through the authorized person in India, irrespective of the fact he has not crossed the minimum threshold limit.

Non-Resident foreign taxpayers are those suppliers who do not have a business corporation in India and have come for a short period to make supplies in India. Such a person is required to furnish details of all taxable supplies in GSTR-5.

It will contain all business details for non-resident (NR), including the details of sales & purchases. Information from GSTR-5 will flow into GSTR-2 of buyers.

This is a unique certificate of registration issued to a casual taxable person or a non-resident taxable person. The registration is temporary and is valid for the period defined in the application or 90 days from the effective date of registration, whichever is earlier.

Such a person can make taxable supplies only after the issuance of the certificate of registration.

In such a case, the NR must file GSTR-5 within 7 days after the last day of the period of registration.

According to the Indian GST Act of 2017, a non-resident foreign taxpayer is the person or company which is engaged in making taxable supplies of products/services or both in any place of India through any means but has no fixed location of business/service or residence in India.

NRI or not, every individual must file a tax return if their income exceeds Rs 2,50,000. But note that NRIs are only taxed for income earned/collected in India.

The Integrated Goods and Services Tax Act of 2017 allows a foreign national or an NRI, who enters India for a stay of less than six months, to claim a GST refund when he leaves India.

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To reduce the compliance burden and to provide ease in doing business in India, many indirect taxes like VAT, Service Tax, Excise duty, Sales Tax, Import-Export, Octroi, etc. only require GST registration India. GST registration is mandatory if a person’s turnover crosses a prescribed limit. But if goods or services are supplied to another state in India or through an ecommerce site, GST registration is mandatory irrespective of turnover. Also, any non-resident person or company supplying goods or services in India needs to take the online GST registration in India regardless of turnover.

Provisional Registration

• A non-resident taxable person will file electronically an application for registration using the FORM GST REG-09 along with a self-attested copy of his valid passport.
• The application must be properly signed or verified through EVC.
• It must be submitted at least five days before the initiation of the business.
• In case it is a foreign business entity (incorporated or instituted outside India), the application for registration shall be submitted along with its tax identification number of that country (similar to our PAN) or its PAN (if it has one).
• An advance deposit of tax (based on estimation) must also be submitted along with the application.

Final Registration

Final registration will be made in the same way as in the case of resident taxpayers as follows:

• If the person wants to register under GST, then he will submit an application electronically using the FORM GST REG–26. Any information must be provided within three months.
• If the information is accurate and complete, the final GST registration will be provided in FORM GST REG-06
• If the information is not correct, then the officer will issue a show-cause notice using FORM GST REG-27. A reasonable opportunity of being heard will be provided after which the provisional registration will be cancelled through the FORM GST REG-28
• If the applicant’s reply is satisfying, then the show cause notice issued can be nullified by issuing an order via the FORM GST REG- 20

The application for registration made by a non-resident will be signed by his authorized signatory, who must be a person resident in India with a valid PAN.

NRI CA Services will help you with online GST registration in India. Contact us today and share your requirements with us. Our experts are constantly available to assist you!

Once the company gets registered in India, it is must to file MCA forms in India every year. Apart from this, the company shall ensure timely ROC compliance. Few examples are, complying with AGM documentation, Maintaining Minutes book and ROC Filing at the time of issue or new allotment of shares, change of name or main objects of the Company, Appointment & Resignation of Directors, Transfer of Shares, Appointment of MD or CEO, Change in the Registered Office, Change in the Authorized Capital/ Paid-up Capital, Charge, etc.

Yes, revised filing of all Annual filing eForms except Form 23AC/ACA and Form 23AC-XBRL/ 23ACA-XBRL can be done in respect of the Forms already filed, but the fees for subsequently revised filing shall be charged, considering it as a new filing.

The company will have to file all the due annual returns and balance sheets for the financial years for which it has been labeled as defaulting. Once the same are filed, the defaulting status of the company will be discarded, and the company will be able to file normally.

There are certain types of Companies that are needed to file their Balance sheet and Profit and Loss or Financial Statements in XBRL.

• All companies listed with any Stock Exchange(s) in India and their Indian subsidiaries;
• All companies having paid-up capital of Rupees five crore and above;
• All companies having turnover of Rupees one hundred crores and above;
• All companies which were hitherto covered under the Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2011: However, Banking, Power, NBFC, and Insurance Companies are spared from XBRL filing till further orders.
• For filing 23AC/ACA, XBRL stakeholders are needed to use taxonomy-based upon new Schedule VI of the Companies Act, 1956.
• For filing, AOC-4 XBRL stakeholders are required to use taxonomy-based upon Schedule III of the Companies Act, 2013.

For filing MCA forms in India, you need the assistance from the experts. You may directly contact us at NRI CA services. We will complete the filing of your MCA form under the set rules and regulations by following the complete corporate governance in India. Contact Now!

A person who is a resident of one country and earns any income in some other country may end up paying income tax in both countries. This may happen because few countries charge tax on the basis of residential status and few charges on the basis of source of income. To address this issue or a similar kind of issue, many countries have entered a written agreement to allocate taxing rights between nations. The focus is on elimination or relief from double taxation. This written agreement is called as Double Avoidance Agreement.

When an NRI has any income or residential status in India on which he is liable to pay tax in his resident country as well as in India, then he can consult DTAA consultancy for some relief. Double Taxation Avoidance Agreement covers various provisions that tackle an issue like allocating taxing rights or minimum withholding tax on particular income in source country or tax credit to the extent taxes have already been paid abroad etc.

It is not mandatory to consult DTAA in all international cases. An NRI can go with only domestic provisions of countries involved without considering DTAA. But in case he feels considering provisions of DTAA is beneficial for him, he can go with it. In that case, he shall get Tax residency certificate from his resident country and shall fill a self-declaration form F while filing the tax return in India. This TRC and Form F is not required to be submitted anywhere but shall be kept as a record for future references or may have to submit to Indian Income tax authorities in case of any inquiry.

In case you have questions related to residential status in India or seek DTAA consultancy, NRI CA Services can assist you.

As soon as entrepreneurs begin or plan to commence a new business, they begin to hear these terms like TAN, PAN, DIN, and DSC more frequently. While an entrepreneur plans things and comes up with business approaches, there are also legal obligations that the business must accomplish. These legalities are essential at every step of setting up the business and further running it. Therefore, it first becomes important to know them thoroughly and get DIN/DSC/PAN/TAN assistance from the experts.

PAN (Permanent Accountant Number) is an identification number assigned to all taxpayers in India. If nonresidents are holding NRO/NRE account in India, they shall update their PAN in bank. PAN is also required to be quoted while doing any financial transaction or remitting funds out of India.

Following documents are needed for applying for a PAN card online:

Identity proof: May be a photo id, ration card, passport, driving license, Aadhar card.

Address proof: Copy of electricity bill, landline telephone bill, water connection bill, and gas connection card that is not more than three months old, bank account statement, passport, passport of the spouse, voter ID card, Aadhar card, domicile certificate issued by the government.

Proof of date of birth:Birth certificate issued by the Municipal Corporation.

Every Tax deductor is required to quote the TAN (Tax deduction and collection Account Number) while making any payment of tax to the Account of Central Government.When nonresidents sell their property in India, buyer deducting withholding tax has to file TDS return in India. This TDS return cannot be filed without obtaining TAN.The Tax deduction and collection Account Number starts with alphabets, followed by numerical digits, and again ends with an alphabet. For registration, no particular proof of identity is required. One needs to fill Form 49B and submit it through a process electronically facilitated by the Income Tax Department. For getting TAN in India, you can rely on fast and reliable NRI services.

A lot of documentation today is in the electronic format and DSC (Digital Signature Certificate) help to establish the identity of the sender. It is required for income tax filing and MCA filings of companies in India. If you concerned about learning how to get digital signature in India, then NRI Services are here to assist you. We have made getting DSC in India easy and convenient for all.

Any person intending to become a director in a company shall obtain DIN (Director Identification Number). And for getting DIN for Director in India, you would require the assistance of professionals.

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After an Individual / Assesse (also known as a taxpayer) file his Income-tax return, it is processed by the Income-tax Department. If there is any confusion/mistake/miscalculation noticed in the Income-tax return filed, then the same is intimated to the Assesse by sending him an Income tax notic an income-tax notice.

There are various types of Income tax notices, issued by the Income Tax Department under various sections like section 139(9), 143(1), 143(2), 148, 156 & more. Now the response to these notices can be filed online by submitting relevant documents with an appropriate response.

If the Assessing Officer considers that the return filed by the Assessee is defective, he may intimate the defect to the Assessee by issuing an Income-tax notice u/s 139(9) of Income-tax Act and allow him to rectify the error within 15 days. Some of the cases where an Income-tax notice under section 139(9) is issued are:

• Balance Sheet and Profit & Loss Statement are not filed in a case where Assessee is required to maintain such details.
• Income-tax Return is filed before payment of self-assessment tax.
• Tax Deducted at Source (TDS) deducted has been claimed as a refund, but no Income details are provided in return.
• Details of taxes (TDS Other) are filled, but no Income details are provided in return. To correct the defect, an Income-tax return is required to be filed in response to the Income-tax Notice received within 15 days of notice. Otherwise, the return is treated as invalid.

Are you concerned about how to reply a notice received from Indian Income Tax Department? If yes, then we are here to help you. We will ask you to send the Income Tax notice to us to understand your case. We will make you understand your case and will ask you to send us the required documents to give the response to notice through income tax online portal. Once the response is filed we will send you the acknowledgement of response for your records. Our team also responds to questions related to it like why I got a notice from income tax department or how to create online income tax account.