Tax on allowances

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Nandakumar T S (Querist)
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22 May 2013 Need to understand if an allowance in the form of LIVING EXPENSES reimibursed or paid to an employee while his/her official deputation overseas, in INR attracts TDS or not.
This is apart from regular CTC.
Suggestions & computation methods will be appreciated.

Nandakumar
Bangalore

Mr. Ashish Barthwal -
Appreciate your revert
Please share a quick link to Rule 2BB of IT Act

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Guest (Expert)

23 May 2013 As per rule 2BB of income tax act:-
Any sum/allowance by whatever name called provided to the employee by the employer in relation to the following will be exempt u/s 10(14) to the amount actually incurred(but exemption can not exceed the actual allowance provided)

1 any allowance granted to meet the cost of travel on tour or on transfer

2 any allowance, whether, granted on tour or for the period of journey in connection with transfer, to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty
(these sum may include the amount give to meet the cost of transfer)

Reimbursements are covered under Rule 2BB.

But living Expenses is a wider term, which may include many types of allowances such as for medical, lunch etc
(which may be other than the the exempted allowances specified Rule 2BB)

Nandakumar T S

Nandakumar T S (Querist)
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23 May 2013 Dear Mr. Ashish Barthwal
Appreciate your revert & view.
Please share a quick link to Rule 2BB to understand better.

Nandakumar
Bangalore

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Guest

Guest (Expert)

23 May 2013 Here is the link

http://law.incometaxindia.gov.in/DIT/File_opener.aspx?page=ITRU&schT=rul&csId=01474617-a811-4e9e-86d2-01b2e5eca954&rNo=2bb&sch=&title=Taxmann%20-%20Direct%20Tax%20Laws

Nandakumar T S

Nandakumar T S (Querist)
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23 May 2013 Dear Mr. Ashish,
Request you to indicate if such allowances can be classified & considered under Per Diem Allowance & how is Tax treated

Regards
Nandakumar

Nandakumar T S

Nandakumar T S (Querist)
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27 May 2013 Mr. Ashish,
Await your response.

Regards
Nandakumar