NRE days Calculator:-Download
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Understanding the Indian Financial year for taxation purposes
NRIs may sometimes find it confusing when they hear terms such as previous financial year, assessment year etc. Hear are three points to help clarify these terms and help understand what a financial year is and how a financial year differs from a assessment year.
1.The financial year in India begins on the 1st of April every year and ends on 31st March of the subsequent year.
2.The year in which the income is earned is known as the previous year. The financial year following a previous year is known as the assessment year.
3.The assessment year is the year, in which the salary earned in the previous year is taxable.
Provisions regarding Resident and Non-Resident under Income Tax Act
-Screen shot from www.incometaxindia.gov.in
Note:- As per above , condition no-2 will not be applicable to
(a) those who are leaving India for employment purpose ( This is the case of seafarers working on foreign ships/ those who are working abroad)
(b)those who leave India as crew of Indian ship (this is the case of Indian registered ships)
If condition 2 is applicable, for NRE status- One should not be in India more than 60 days in the financial year and not more than 365 days in last four years.
An Indian citizen who leaves India in any previous year for the purpose of employment outside India OR as a crew member of an Indian ship would be treated as a resident in India if he stays in India in that year for 182 days or more.
- Conversely, if he stays in India for less than 182 days(ie 181 days in india), he will be treated as non-resident for that year and his foreign income would not attract tax liability.
As per this, to get NRE status, One has to be outside India(for employment purpose)
184 days in non-leap year and
185 days in leap year.
From 1st April 2015, As per following circular from Finance Ministry, Indian crew working on Indian registered , foreign going ships in indian water will be considered as OUTSIDE India for taxation.
- In such cases CDC dates will be counted for establishing the no of days outside India.
- In case of those who are working on foreign registered ships, same old rules will apply and dates stamped on passport will be taken for NRE days.
- Arrival India dates will be considered as outside India for counting.(But better to do some more days if possible to avoid problems from IT office) .
- If you are served with notice from IT Department considering, the arrival dates are counted as days in India, you can submit the IT Tribunal verdict (given in “Arrival /Departure dates” page in this site to support your case.
## Click to download the new IT circular regarding certain Indian Registered Ships :- notification70_2015
126. Computation of period of stay in India in certain cases. – (1). For the purposes of clause (1) of section 6, in case of an individual, being a citizen of India and a member of the crew of a ship, the period or periods of stay in India shall, in respect of an eligible voyage, not include the period computed in accordance with sub-rule (2).
(2). The period referred to in sub-rule (1) shall be the period beginning on the date entered into the Continuous Discharge Certificate in respect of joining the ship by the said individual for the eligible voyage and ending on the date entered into the Continuous Discharge Certificate in respect of signing off by that individual from the ship in respect of such voyage.
Explanation: For the purposes of this rule,-
(a) “Continuous Discharge Certificate” shall have the meaning assigned to it in the Merchant Shipping (Continuous Discharge Certificate-cum- Seafarer’s Identity Document) Rules, 2001 made under the Merchant Shipping Act, 1958 (44 of 1958);
(b) “eligible voyage” shall mean a voyage undertaken by a ship engaged in the carriage of passengers or freight in international traffic where-
(i) for the voyage having originated from any port in India, has as its destination any port outside India; and
(ii) for the voyage having originated from any port outside India, has as its destination any port in India.’.
[Notification No. 70/2015/ F.No.142 /12/2015-TPL]