Circular No. 13/2017

Clarification regarding liability to income tax in INDIA for a non resident seafarer receiving remuneration in NRE non resident external account maintained with an indian bank

What this is

Circular No. 13/2017 was issued by the Central Board of Direct Taxes on 11 April 2017. Its subject is Clarification regarding liability to income tax in INDIA for a non resident seafarer receiving remuneration in NRE non resident external account maintained with an indian bank.

This is a clarification. The Board is stating how it reads a provision. That reading binds the department; it does not bind a court, and where the section says otherwise the section wins.

What it does

Settles that salary accruing to a non-resident seafarer for services rendered outside India on board a foreign ship is not to be included in total income merely because it has been credited to his Non-Resident External account with an Indian bank. The Board reads section 5(2)(a) as taxing only income received or deemed to be received in India, and treats the credit into the NRE account as not making the salary receivable in India.

Why it was issued

Representations were received that salary of non-resident seafarers for services rendered outside India on foreign ships was being taxed in India for the sole reason that it was received into an NRE account maintained in India.

Who it reaches

Non-resident seafarers on foreign ships crediting salary to an NRE account
Assessing Officers taxing such salary on receipt in India
Shipping manning agents advising crew on Indian tax
Seafarers facing a demand on a section 143(1) processing

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.5	s.5

The instrument, as the Board published it

The department publishes this one only as a PDF, so the words below were read out of that PDF by machine. That reading can carry its own mistakes — a misread number, a broken line. Check the signed document before you rely on a figure in it.

2Apr1711:53
F. No: 500/0712017-FT & TR-Y
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
Foreign Tax & Tax Research - II
FT & TR-Y Division
p.1
Circular Ho. 1312017
Hew Delhi, dated 11.04.2017
Subject: Clarification regardirl'£l liability to income-tax in India for a non-resident seafarer
receiving remuneration in HRE (Non Resident External) account maintained with an Indian
Bank.
Representations have been received in the Board that income by way of salary, received by nonresident seafarers, for services rendered outside India on-board foreign ships, are being subjected
to tax in India for the reason that the salary has been received by the seafarer into the NRE bank
account maintained in India by the seafarer.
2. The matter has been examined in the Board. Section 5(2)(a) of the Income-tax Act provides
that only such income of a non-resident shall be subjected to tax In India that is either received or
Is deemed to be received in India. It is hereby clarified that salary accrued to a non-resident
seafarer for services rendered outside India on a foreign ship shall not be included in the total
income merely because the said salary has been credited in the NRE account maintained with an
Indian bank by the seafarer. J _______ 4-)
To
~hJan;;- Under Secretary (FTliTR-V)
(a) Chairman, Members and all other Officers of the Central Board of Direct Taxes.
(b) Pro CCIT/Pr.DGIT/CCIT/DGIT with a request to circulate the same amongst aU Offkers in
their Region I Charge.
(e:1 Commissioner (Media 6: Technical Poli cy) and Official Spokesperson, CBOT.
(d) Addl Director General of Income-tax (PR, PP &: Oll
(e) ITCC Section of CBDT (3 copies)
(f) ADG (Systems)-IV for uploading on t he Departmental website.
(9) Databa~ e Cell fo r uploadill8 on the IRS Officers website.
Ih) Hindi cell of Department of Revenue, for Hindi translation_
til Guard File. J~ r
(Sub ash Janga\a)
Under Se retary (FTflTR·V)
Page 1 of 1

What to watch

Non-resident status for the year has to be established independently; the circular assumes it and does not relax the residence test.
The services must have been rendered outside India on a foreign ship; a voyage in Indian waters or on an Indian ship is not covered by this text.
The relief rests on the salary having accrued outside India, so a salary that accrues in India is untouched.
The copy supplied is a fax scan with the circular number rendered as "Ho. 1312017" and other OCR damage, so verify against the official text before quoting.

Where you meet it

In a section 143(1) intimation or a scrutiny assessment adding a seafarer's foreign wages, and in a refund claim where tax was deducted or paid on such salary.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Notification No. 13/2024 [F.No. C-14011/41/2018-V&L] / SO 312(E) — Ministry of Finance 19 January 2024
Notification No. 12/2024 [F.No. C-14011/46/2018-V&L] / SO 311(E) — Ministry of Finance 19 January 2024
Circular No. 22/2022 — Condonation of delay under section 119 2 b of the income tax act 1961 in filing of form no.10a 1 November 2022
Notification No. 93/2021 [F.No. 370142/34/2021-TPL(Part III)] / GSR 578(E) — Ministry of Finance 18 August 2021
Circular No. 3/2021 — Circular under section 10 of the direct tax vivad se vishwas act 2020 4 March 2021
Circular No. 21/2020 — Clarifications on provisions of the direct tax vivad se vishwas act 2020 4 December 2020

← Circular No. 15/2017 · Circular 12/2017 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.

What it means in practice. This page is the instrument. For the question it answers, what the Board decided and what to do about it, see CBDT Circular 13/2017 — a seafarer's salary paid into an NRE account.