Seafarer Tax Rules 2026: Period of Stay Computation for Ship Crew Under Rule 8 and Section 6(6)

If someone files your 2026-27 return citing Rule 126, the reference is out of date. The method isn’t wrong, but ask them to update it.

The residence test, in plain terms

Under Section 6(2), you are resident in India for a tax year if either:

• you are in India for 182 days or more in that year, or
• you are in India for 60 days or more in that year and 365 days or more across the four preceding years.

The second test is the one that catches most people. Section 6(3) switches it off for an Indian citizen who leaves India in that tax year as crew of an Indian ship, or for the purposes of employment outside India.

So for a year in which you leave India to join a ship, one number decides: 182.

• 181 days or fewer in India: non-resident.
• In a 365-day tax year, that means at least 184 days outside India.
• Tax Year 2027-28 includes 29 February 2028. That year you need at least 185 days outside.

“India” is bigger than the coastline

Section 2(52) of the 2025 Act defines India to include its territorial waters, the seabed below them, the continental shelf and the exclusive economic zone.

Read that again if you work offshore. A day on a vessel inside India’s EEZ is at real risk of counting as a day in India.

What Section 6(6) does

Section 6(6) does not set a number of days. It says that for an Indian citizen who is crew of a foreign-bound ship leaving India, the days in India for that voyage are worked out in the prescribed manner.

Rule 8 is that prescribed manner.

How Rule 8 counts your days

Rule 8 applies to an eligible voyage. That is a voyage by a ship carrying passengers or freight in international traffic that either:

• starts at an Indian port and ends at a foreign port, or
• starts at a foreign port and ends at an Indian port.

For an eligible voyage, Rule 8 removes a block of days from your India count. The block runs from the sign-on date entered in your CDC to the sign-off date entered in your CDC for that voyage.

The benefit is specific. Without Rule 8, these days would count as India days:

• days alongside an Indian berth after you’ve signed on
• days at anchorage off an Indian port
• days transiting Indian waters and the EEZ

With Rule 8, the entire CDC period counts as time outside India, including those days.

When Rule 8 does not help you

You join and sign off at foreign ports, and the ship never touches India. Rule 8 isn’t needed. You were physically outside India, so your count runs on immigration departure and arrival dates.

Coastal voyages. Indian port to Indian port is not international traffic, so it is not an eligible voyage. Those days stay India days.

Offshore work in Indian fields. A vessel working an Indian offshore field is not travelling to a foreign port, and the field sits inside “India” as defined in Section 2(52). Plan on those days counting as India days unless your CA advises otherwise.

Mid-contract calls at Indian ports. Suppose you joined abroad and the ship later spends several days at an Indian port. How those days are treated depends on how the voyage and your CDC entries are read. This is a grey area. Take your CDC and port-call dates to a CA rather than guessing.

Three worked examples: Tax Year 2026-27

These examples use the conservative convention most practitioners follow: the day you leave India and the day you land back both count as days in India. Rule 8’s CDC period is counted inclusive of both dates.

Example 1: Rule 8 changes the result

A Third Engineer joins a foreign-flag product tanker at Nhava Sheva.

Count:

• The CDC period, 10 June to 9 December, is 183 days. It is excluded under Rule 8.
• 10 December, spent in Singapore, is 1 more day outside India.
• Total outside India: 184 days.
• Days in India: 365 − 184 = 181. Non-resident.

Now remove Rule 8. The three days alongside at Nhava Sheva go back into the India count, which takes you to at least 184 India days. That makes you resident.

Three days at a berth decide the year. That is why Rule 8 matters.

Example 2: A long contract that still falls short

A Chief Officer flies out of Delhi to join a bulk carrier in Rotterdam.

Neither end of this voyage is an Indian port, so Rule 8 doesn’t apply. Count the physical days instead.

• Outside India: 4 July to 3 December = 153 days.
• Days in India: 365 − 153 = 212. Resident.

A five-month contract is not enough on its own. To be non-resident, this officer needs at least 31 more days outside India before 31 March 2027. A second contract that starts in time would do it.

If they stay resident, the next question is whether they are “not ordinarily resident”. Under Section 6(13)(a), you are NOR if you were either:

• a non-resident in nine of the ten preceding tax years, or
• in India for 729 days or fewer across the seven preceding tax years.

Example 3: Offshore, inside the EEZ

An AB on an offshore support vessel works an Indian field inside the EEZ, joining and signing off at Mumbai.

This is not international traffic, so there is no Rule 8 exclusion. The field is within “India” as the Act defines it.

Treat these days as India days when you plan your year, and get professional advice before assuming otherwise.

Where the 120-day rule and deemed residency fit

The 120-day rule, Sections 6(4) and 6(5). These apply to an Indian citizen or person of Indian origin who comes on a visit to India and has Indian income above ₹15 lakh, excluding income from foreign sources. For that person, the 60-day test becomes 120 days.

In a year you leave India for employment, Section 6(3) already switches the 60-day test off. Whether the 120-day rule reaches a particular seafarer’s year depends on the facts, so ask your CA. Where it does apply, Section 6(13)(b) makes you NOR automatically.

Deemed residency, Section 6(7). An Indian citizen is deemed resident if both of these are true:

• they are not liable to tax in any other country because of domicile or residence
• their Indian income, excluding foreign sources, exceeds ₹15 lakh

Many seafarers are not taxed on their wages by any country. If you have substantial Indian income, such as rent or a gain on selling property, this is the provision to watch. A person deemed resident this way is NOR under Section 6(13)(c).

Two cautions on NOR:

1. Ship salary and the ₹15 lakh limit. Income from foreign sources is defined in Section 6(14). Salary for work done outside India generally falls in that category, so it usually doesn’t count toward the ₹15 lakh. Confirm how it applies to your contract.
2. Where your salary lands. NOR status shields foreign-earned income only where that income is also received outside India. If your employer pays straight into an Indian bank account, talk to a CA before assuming you’re covered.

Salary in your NRE account: what Circular 13/2017 does and doesn’t say

CBDT Circular No. 13/2017, dated 11 April 2017, gives this assurance. A non-resident seafarer’s salary for services outside India on a foreign ship is not added to total income just because it was credited to an NRE account with an Indian bank.

Read the conditions closely:

• It covers non-residents. If your day count makes you resident, this circular doesn’t help.
• It names NRE accounts. It says nothing about NRO accounts.
• It concerns service on a foreign ship.

The circular was issued under the 1961 Act. Ask your CA to confirm how it is being applied under the 2025 Act before you rely on it for 2026-27.

The records that win a scrutiny case

Keep these for every tax year:

• Your CDC, with a sign-on and a sign-off entry for every contract. A missing entry leaves you arguing from secondary documents.
• Passport and immigration records for every departure and arrival.
• Your Seafarer Employment Agreement (SEA) for each contract. It is your evidence that you left India “for the purposes of employment outside India”.
• Wage statements and account credit advices showing where your salary was paid.
• Port-call details for any contract where the ship called at Indian ports.
• A one-page day count per tax year, listing each contract, its dates and the running total.

Cadets and trainees: this count starts with your very first CDC entry. If you haven’t signed on yet, start with [what actually gets you on board in 2026 

Six mistakes that cost seafarers their non-resident status

1. Citing a “draft” rule or old Rule 126 for Tax Year 2026-27. Rule 8 is notified law. Use it.
2. Assuming CDC dates always apply. They apply to eligible voyages only. Joining and leaving abroad means your count runs on immigration dates.
3. Forgetting the EEZ. Offshore and coastal days inside Indian maritime zones can count as India days.
4. Rounding the count. One day decides it. 181 India days is non-resident; 182 is resident.
5. Leaning on NOR while your salary lands in India. NOR protects foreign income that is also received abroad.
6. Treating one long contract as a guarantee. Five months at sea can still leave you with more than 182 India days.

Before 31 March 2027: Your Checklist

• List every contract in Tax Year 2026-27, with CDC sign-on and sign-off dates
• Mark each one: eligible voyage (Indian port involved) or foreign-to-foreign
• Add immigration departure and arrival dates for every trip
• Flag any coastal, offshore or Indian-port days
• Total your India days. If you are at 170 or above, plan your next contract dates now
• Confirm your salary is paid into the right account type
• If your Indian income approaches ₹15 lakh, check Sections 6(5) and 6(7) with a CA
• Give your CA the CDC, passport, SEAs and day count together, not piecemeal