Tax in India for wages earned outside India?

Question

I work on a foreign flag ship for foreign owners registered in Norway, sailing in International waters. The wages are remitted through a diamond account of corporation bank set up by my employers through their agents in Mumbai. The wages are remitted in indian rupees in NRE account after conversion from dollars in Mumbai FCS branch.
The ITO has levied tax citing section 5.2 of IT act, that the first point of receipt is India and only a paper transaction took place on board the ship by way of account of wages on a monthly basis. Not withstanding NRI status.
is the ITO right in his ruling?? If not how can I protect myself.

Answer 1

Best Answer - Chosen by Voters

You really need to consult a tax expert on the issue. But as per my knowledge, taxability of your income will depend upon your resident status. If you are an NRI i.e. if you have been out of India for more than 182 days in the financial year for which income is being assessed, then you will not be taxed in India for your income earned abroad. The money transferred to your Indian account has to be shown not a salary payment but as remittance (transfer of capital receipt) by you out of your foreign income/bank balance, for supporting your family in India. You will have to fight it out in appeal before ITAT, but I am sure a case can easily be made out.

Answer 2

YES IN THE CASE OF NRIs THE TAX DEDUCTED IN INDIA
IS CORRECT.

Source(s):

CS