NRI Status for Seafarers Under the New Income Tax Act, 2025

Understanding the Meaning of “For the Purposes of Employment Outside India”

At Tax Harbour, we have received numerous queries from seafarers seeking clarity on how many days outside India are required to qualify as a Non-Resident (NRI) under the newly enacted Income Tax Act, 2025, effective from 1 April 2026.

The concern primarily arose because the first version of the Income Tax Bill, introduced on 13 February 2025, replaced the long-standing phrase “for the purposes of employment outside India” with the narrower “for employment outside India.” This created uncertainty, especially within the seafaring community.

However, when the Bill was reintroduced on 11 August 2025 and later enacted on 21 August 2025, the original phrase was fully restored, ensuring that the interpretation remains exactly as it was under the Income Tax Act, 1961.

Why This Phrase Matters for Seafarers

Under Section 6, an Indian citizen who leaves India for the purposes of employment outside India is eligible for the relaxed residential test of 182 days, instead of the usual 60 days.

Meaning for Seafarers:

If a seafarer spends 184 days or more (185 days or more in a leap year) outside India in a financial year in connection with their employment, they qualify as an NRI.

This position remains entirely unchanged under the 2025 Act.

What “For the Purposes of Employment Outside India” Means

The phrase has consistently been interpreted in a wide and practical sense. It covers not only the act of working aboard a vessel but also activities that are directly connected to or required for overseas employment.

Examples That Qualify as Employment Purposes

1. Company-Arranged Seminars, Meetings, or Pre-Joining Briefings Abroad

If a seafarer travels overseas to attend employer-organized briefings, safety meetings, or vessel familiarization sessions, and is paid during this period

➡️ the travel is treated as part of employment outside India.

2. Mandatory Training, Certification, or Revalidation Courses

Seafarers often undergo essential courses such as STCW updates, simulator training, or safety refreshers before joining a vessel. When such training is attended abroad

➡️ the purpose remains employment-related, as these courses are compulsory for sea service.

3. Travel to Join a Ship at a Foreign Port

If a seafarer leaves India specifically to sign on at a foreign port (e.g., Rotterdam, Singapore, Manila)

➡️ the purpose of travel is unambiguously employment and fully qualifies.

Examples That Do NOT Qualify

These situations are considered personal and do not fall under employment purposes:

• Vacation or leisure travel

• Family visits abroad

• Medical travel not connected to work

• Tourism

Bottom Line for Seafarers

The Income Tax Act, 2025 preserves the long-standing benefit available to seafarers. The phrase “for the purposes of employment outside India” remains unchanged, ensuring that all employment-related days spent abroad including briefings, mandatory training, and joining the vessel, continue to count toward NRI determination.

Seafarers who remain outside India for 184 days or more on employment-related duties will continue to qualify as NRI under the new law.

A Closing Note from the Tax Harbour Team

At Tax Harbour, we understand that seafarers face unique challenges when it comes to tax planning and residential status. Our commitment is to provide clear, reliable, and up-to-date guidance tailored to the maritime community. We will continue to monitor developments closely and ensure that you have the information you need to make confident financial decisions.

If you need personalized assistance with NRI status determination, tax filing, or documentation, our team is ready to support you every step of the way.

-CA Jaya Mittal