Section 80RRA in The Income- Tax Act, 1995

80RRA. 6[ Deduction in respect of remuneration received for services rendered outside India 7

(1) Where the gross total income of an individual who is a citizen of India includes any remuneration received by him in foreign currency from

1. Prior to the omission, the proviso read as under:" Provided that where the individual renders continuous service outside India in such University, institution, association or body for a period exceeding thirty- six months, no deduction under this section shall be allowed in respect of the remuneration for such service relating to any period after the expiry of the thirty- six months aforesaid."

2. Inserted by the Finance Act, 1969, w. e. f. 1- 4- 1970.

4. Substituted for" musician or actor" by the Finance (No. 2) Act, 1980, w. e. f. 1- 4- 1980.

5. Substituted for" and such income is received in, or brought into, India by him or on his behalf in accordance with the Foreign Exchange Regulation Act, 1947 (7 of 1947 ), and any rules made thereunder, there shall be allowed a deduction from such income of an amount equal to twenty- five per cent of the income so received or brought, in computing the total income of the individual" by the Finance Act, 1990, w. e. f. 1- 4- 1991

6. Substituted by the Finance (No. 2) Act, 1977, w. e. f. 1- 4- 1978. It was inserted by the Finance Act, 1973, w. e. f. 1- 4- 197

any employer (being a foreign employer or an Indian concern) for any service rendered by him outside India, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the individual, a deduction from such remuneration 1[ of an amount equal to,-

(i) fifty per cent of the remuneration; or

(ii) seventy- five per cent of such remuneration as is brought into India by, or on behalf of, the assessee in accordance with the Foreign Exchange Regulation Act, 1973 (46 of 1973 ), and any rules made thereunder, whichever is higher]: 2[ Omitted by the Finance Act, 1990 , w. e. f 1- 4- 1991

(2) The deduction under this section shall be allowed-

(i) in the case of an individual who is or was, immediately before undertaking such service, in the employment of the Central Government or any State Government, only if such service is sponsored by the Central Government;

(ii) in the case of any other individual, only if he is a technician and the terms and conditions of his service outside India are approved in this behalf by the Central Government or the prescribed authority. Explanation.- For the purposes of this section,-

(a) " foreign currency" shall have the meaning assigned to it in the Foreign Exchange Regulation Act, 1973 3 (46 of 1973 );

(b) " foreign employer" means,-

(i) the Government of a foreign State; or

(ii) a foreign enterprise; or

(iii) any association or body established outside India;

(i) constructional or manufacturing operations or mining or the generation or distribution of electricity or any other form of power; or

(ii) agriculture, animal husbandry, dairy farming, deep sea fishing or ship building; or

(iii) public administration or industrial or business management; or

(iv) accountancy; or

1. Substituted for" of an amount equal to fifty per cent thereof" by the Finance Act, 1987, w. e. f. 1- 4- 1988.

2. Prior to the omission, it read as under:" Provided that where the individual renders continuous service outside India under or for such employer for a period exceeding thirty- six months, no deduction under this section shall be allowed in respect of the remuneration for such service relating to any period after the expiry of the thirty- six months aforesaid."

(v) any field of natural or applied science (including medical science) or social science; or

(vi) any other field which the Board may prescribe in this behalf, who is employed in a capacity in which such specialised knowledge and experience are actually utilised.] The relationship of employer- employee master- servant should exist between the assessee and the payer of the remuneration. Individuals who render service outside India in the capacity of independent contractors or consultants are not eligible for the deduction. Seamen working as marine engineers, radio officers masters, mates, pursers or captains are to be regarded as technicians. Helpers to masons who assist in concrete mixing, RCC work, etc. and other persons similarly placed will be regarded as technicians. If the service is for a period not exceeding 36 months there is no bar to the same individual claiming the deduction in respect of any subsequent employment after he had served the same employer-. Where the services outside India are performed under different employers the period of service under these employers cannot be clubbed together so as to deny the benefit of deduction- as the services under different employers would be under different agreements. Remuneration received by seamen outside India in foreign exchange for services rendered outside India would qualify for the deduction.