11 March 2013
After removal of FBT daily allowances or per diem are taxable in the hand of employees unless it is paid to meet the expenses exclusively incurred in the performance of the official duties.
The same has been explained in section 10(14) of the Act.
“14) (i) any such special allowance or benefit, not being in the nature of a perquisite within the meaning of clause (2) of section 17, specifically granted to meet expenses wholly, necessarily and exclusively incurred4 in the performance of the duties of an office or employment of profit5, 6[as may be prescribed], to the extent to which such expenses are actually incurred for that purpose”
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