Working on offshore platforms, drillships, and Floating Production Storage and Offloading (FPSO) units presents unique tax challenges, as these vessels often operate stationary within an exclusive economic zone (EEZ).
Indian EEZ vs International Waters
If an offshore rig operates in the Indian Continental Shelf or Exclusive Economic Zone (within 200 nautical miles of the Indian coast), Indian tax laws deem that location as part of India for petroleum extraction activities. Consequently, crew on domestic rigs cannot claim Rule 126 benefits.
Foreign Offshore Rigs
Conversely, if you serve on an offshore installation located in foreign waters (e.g., North Sea, Persian Gulf, West Africa) under a foreign ship contract, your physical presence outside India qualifies for non-resident status.