06 December 2015
One of friend travels outside India for marketing purpose (in different countries).he stays 170 days in an year
Apart from his salary Company transfer to his bank account following amounts
1) reimbursement of actual amount against bill towards Flight Charges.
2) reimbursement of actual amount against bill towards his transportation during his visit in abroad.
3) reimbursement of actual amount against bill towards his food expenses.
4) reimbursement of actual amount against bill towards his stay in hotel rooms.
5) reimbursement of actual amount against bill towards any expenses which is related to (or for the purpose of business). E.g lunch bought to client.
6) Apart from all these reimbursement company also pay an amount in INR (which is equal to USD 50 per day of his visit in Abroad). For this he need not submit any bill.
Please tell me which item is taxable and which item is not taxable?
06 December 2015
I agree that Item number 1 to 5 are not taxable.
Still I am having some concern about Item No 6.
All the expenses including business expenses and his accommodation, His food & “non-alcoholic beverage” his flight ticket, taxi expenses etc. is reimbursed to him through if he submits bill. Apart from this he is getting an amount of in INR (equal to 50 USD per day of his stay in abroad) this payment is not against any bill. No body Check whether he spent or not, the amount which he has received as item number 6( But all reimbursement which i said item 1 to 5 are being verified against bill and reimbursed actual amount)
1) Still if it is not taxable; can a company reconstruct an employees salary so that this foreign allowance will be increased (say 100 usd per day) and his salary will be decreased. Which will help him in saving tax. Is it possible? 2) if one travels inside India in different state can he enjoy this facility.
06 December 2015
Thanks Mr. Seetharaaman. Since all his expenses are reimbursed Item no:6 is to be treated as his Savings. Hence TDS will be deducted from Item no:6 . Am I right?
06 December 2015
Besides the above reimbursements some incidental expenses will be there for that this amount is paid. Any savings on this only taxable.
CAclubindia
