When does NRI status apply to Indian crew working on a foreign ship?

(Image: AI Generated)

• Foreign ship crews must check 60-day and 365-day non-resident status rules.
• For FY 2025-26, presence over 182 days means you are a resident for tax purposes

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Wondering whether you hold non-resident status when working as a crew member on a foreign merchant ship? Today’s Ask Wallet Wise explains how the 182-day physical presence requirement applies.

The Ask Wallet-Wise initiative offers expert advice on personal finance and money-related queries. You can email your queries to askwalletwise@nw18.com, and we will try to get a top financial expert to address.

I work on foreign merchant ships as a crew member. I am providing year-wise details of the days I was or were expected to be out of India while working on ships (as shown below). I request that you highlight the requirements for non-resident status for crew members working on ships. Kindly also advise whether I am eligible for non-resident status for FY 2025-26/AY 2026-27.

FY 25-26: 190 days (expected)

FY 24-25: 203 days

FY 23-24: 217 days

FY 22-23: 285 days

FY 21-22: 31 days

Expert’s Advice: According to income-tax laws, the income of a person gets taxed on the basis of their residential status and the source country of income. For a resident of India, their global income is taxed in India, whereas for a non-resident, their Indian income gets taxed irrespective of the country in which he is resident.

Under Indian tax laws, a person's residential status is determined by their physical presence in India after the end of the financial year. An individual is treated as a resident of India if they were physically present in India for a minimum of 182 days in the previous year or were in India for a minimum of 365 days during the four years prior to the year for which the status is being determined and were physically present in India for a minimum of 60 days during the relevant previous year.

So if one satisfies any conditions, they are treated as a resident of India for tax purposes. In the case of a citizen of India who works for an Indian Ship, instead of the 60 days of physical stay in India during the immediately previous year required for the second condition, the person will be required to be physically present in India for at least 182 days during the relevant financial year.

The 182-day physical presence requirement applies to Indian citizens working on an Indian ship, not to all those working on a ship. Since you are working on a foreign ship, you will become a resident of India for tax purposes even if you have been physically present in India for 60 days during the immediately preceding year and were in India for a minimum of 365 days in aggregate during the four financial years preceding the financial year for which the residential status is being determined.

Anyway, since you will be physically present in India for more than 182 days during the financial year 2025-2026, you will be treated as a resident of India, irrespective of your prior physical presence in India.