14/09/2026
To
Smt. Nirmala Sitharaman,
Hon’ble Union Minister for Finance,
Room No. 15074-15075,
5th Floor, B-Wing,
Kartavya Bhawan - I,
New Delhi.
Copy to:
Shri V. Vualnam.
Secretary Finance,
Room No. 16102,
Kartavya Bhawan - I,
New Delhi.
Date: 14/09/2026
Subject: Request for practical and special tax-residency relief for Indian Seafarers in view of the special nature of maritime employment, employment uncertainty and prevailing maritime-security conditions-reg
Respected Madam,
We respectfully submit this representation on behalf of Indian Seafarers seeking a practical review of the provisions governing determination of residential status for tax purposes, particularly in relation to Seafarers who are required to remain outside India for prolonged periods in the course of their employment and who are presently facing unprecedented employment uncertainty and maritime-security risks.
Under the residential-status provisions of the Income-tax Act, an individual is generally treated as resident in India if the prescribed conditions relating to the period of stay in India are satisfied. The law has, however, recognised the special circumstances of Indian citizens who leave India as members of the crew of a forign / Indian ship or for the purposes of employment outside India. Under the earlier Income-tax Act, 1961, Section 6, the 60-day condition in the relevant test was substituted with 182 days in the case of an Indian citizen leaving India as a crew member of an Indian ship or for employment outside India. The Income-tax Department has confirmed that this special treatment has continued under the Income-tax Act, 2025.
The legislation has also recognised the unique nature of foreign-bound maritime employment. In the case of an Indian citizen who is a member of the crew of a foreign-bound ship leaving India, the period of stay in India relating to an eligible voyage is determined in the prescribed manner. Rule 126 of the Income-tax Rules, 1962 provided for exclusion of the period beginning from the date of joining the ship recorded in the Continuous Discharge Certificate and ending on the date of signing off, subject to the prescribed conditions relating to an eligible voyage.
These provisions demonstrate that the Government has historically recognised that Seafarers cannot be treated in the same manner as ordinary land-based employees because their employment is inherently international, rotational and dependent upon vessel availability, contractual requirements, port restrictions, crew changes, international trade and geopolitical circumstances.
However, the present maritime employment environment has changed considerably. Indian Seafarers are facing prolonged periods of unemployment, uncertainty in recruitment, reduction in available vessels and voyages, increased compliance requirements and restrictions arising from geopolitical developments. At the same time, several important international maritime routes are experiencing serious security concerns, including the Red Sea, Bab el-Mandeb, Strait of Hormuz and other strategically sensitive areas.
The present situation creates a serious practical difficulty for Seafarers. A Seafarer may not always be able to obtain employment or may reasonably decline a particular assignment because of security risks, sanctions-related concerns, contractual uncertainty or other circumstances beyond his or her control. Such circumstances are fundamentally different from voluntary unemployment or an ordinary decision not to work.
Seafarers should therefore not be placed in a position where they are economically compelled to accept hazardous or unsuitable shipboard employment merely because of concerns relating to their tax-residency status. The tax framework should recognise that the availability of employment at sea is not continuously within the control of the individual Seafarer.
A further difficulty has emerged from the increasing use of international sanctions and enhanced compliance screening in the shipping industry. Seafarers who have previously served on vessels involved in Iran-related, Russia-related or other sanctions-sensitive trades may subsequently face additional scrutiny when seeking employment with other international shipping companies. In many cases, the individual Seafarer may have had no ownership, commercial, chartering, cargo, routing or decision-making role in the transaction that subsequently became subject to sanctions or enhanced compliance scrutiny.
Nevertheless, the employment history of such Seafarers may result in additional background checks, compliance inquiries, delays in recruitment or reluctance on the part of prospective employers. This can materially reduce their employment opportunities and may result in periods of involuntary unemployment.
It is therefore respectfully submitted that the tax-residency framework should take into account such exceptional circumstances. A genuine Seafarer who is unable to secure employment because of prevailing maritime-security conditions, sanctions-related employment scrutiny, vessel restrictions, geopolitical disruption or other circumstances beyond his or her reasonable control should not be placed at a disadvantage merely because the individual could not obtain sufficient qualifying employment during the relevant period.
The Government may consider introducing a special 'Seafarer Relief Mechanism" under which documented periods of involuntary unemployment or inability to obtain suitable employment arising from exceptional maritime circumstances may be given appropriate consideration for determining residential status. Such a mechanism could be supported by documentary evidence including Continuous Discharge Certificate records, seafarer employment agreements, discharge records, employment applications, rejection or compliance communications from prospective employers, medical or security-related documentation and other evidence considered appropriate by the tax authorities.
We further request that the Government examine whether an appropriate relaxation, exclusion, deferment or special computation mechanism can be introduced for genuine Seafarers affected by extraordinary maritime-security situations. The purpose would not be to create an unrestricted tax exemption, but to prevent the tax-residency provisions from creating an unintended economic compulsion upon Seafarers to undertake employment in unsafe, sanctions-sensitive or otherwise unsuitable maritime circumstances.
We respectfully submit that Seafarers constitute a distinct category of workers. Their workplace is frequently a vessel operating in international waters and foreign jurisdictions, and their employment is governed by a combination of national / international law, flag-State requirements, maritime labour convention, ( MLC) contractual arrangements and international maritime regulations. Their ability to determine the location and duration of their employment is consequently substantially different from that of a land-based employee.
The contribution of Seafarers to India's economy and international trade should also be recognised. Indian Seafarers are an important source of foreign exchange earnings and are essential to the operation of global supply chains. They spend prolonged periods away from their families and perform their duties under demanding occupational, environmental and geopolitical conditions.
We therefore request the Ministry of Finance to undertake a comprehensive review of the practical application of the tax-residency provisions to Indian Seafarers and consider a dedicated policy mechanism that recognises the exceptional circumstances of maritime employment.
We further request that appropriate consultation be undertaken with recognised Seafarers' Organisations, Maritime Employers, Shipowners, Manning Agencies, tax professionals and other relevant stakeholders before finalising any such mechanism, so that the actual working conditions and employment realities of Indian Seafarers are adequately reflected in the policy.
The objective of this representation is not to seek preferential treatment or an indiscriminate tax concession. Our request is for a fair, practical and proportionate framework that ensures that genuine seafarers are not compelled to undertake unsafe or commercially unsuitable employment merely to protect their tax-residency position, particularly during periods of exceptional maritime-security risks and severe employment disruption.
We therefore respectfully request the Hon’ble Finance Minister and the Ministry of Finance to consider appropriate amendments, clarification, relaxation or special provisions for Indian Seafarers and to establish a practical mechanism for recognising documented periods during which a Seafarer is unable to obtain suitable employment because of circumstances beyond his or her reasonable control.
Such a measure would provide much-needed certainty to Indian Seafarers and their families, while preserving the integrity of India's tax administration and recognising the unique contribution and working conditions of India's maritime workforce.
We look forward to the kind consideration of this important issue and appropriate policy intervention in the larger interest of Indian Seafarers and their families.
Yours faithfully,
RP Veettil
National President
Sailors’ Union of India (SUI-BMS)
08104168646
022-22630998
Sailors Union of India (SUI)