Assessment of non resident technical personnel. - Income Tax - 1682/CBDT

INSTRUCTION NO. 1682/CBDT Dated: January 15, 1986 It has been brought to the notice of the Board that there has been no uniformity in the assessment of non-resident technical personnel employed by Drilling Contractors and/or working on offshore rige in India's Exclusive Economic Zone (E.E.Z.). The concerned technical personnel, it is stated, work 28 days on the offshore rig(s) in India's E.E.Z. at the end of which period they are taken off the rig and they, stay outside India's E.E.Z. Some Income-tax Officers do not bring to tax the salary paid to these technical personnel for the period of stay outside India's E.E.Z. 2. In this connection, it is observed after an examination of the terms of agreement between drilling companies and these technical personnel that the salary for the alternate period of 28 days when the technical personnel are taken off the rig and stay outside the E.E.Z. of India is payable in accordance with terms of employment for working on the offshore rigs in the E.E.Z. of India. Thus, the salary for this alternate period, wherever paid, is payable in view of services rendered in India. Accordingly, it is clarified that the salary income for this period in these cases accrues or arises in India. It is, therefore, taxable in India. 3. This may be brought to the notice of all the officers in your charge.