Doubt regarding tax exemption for daily allowance

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pavan (Querist)
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18 November 2019 An Indian employee whose permanent job location and residence is in India working in private sector and temporarily on business visa for short period of time (1-3 months) receives daily living allowance during the stay in other country, will that amount be taxed in India?
If YES,
a. please provide related section which refers to this in the IncomeTax Act
If NO,
a. please provide related section which refers to this in the IncomeTax Act
b. please let me know whether such amount need to be mandatorily mentioned under 'Exempt Income: For reporting purposes' in the ITR form while efiling

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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19 November 2019 No.
As per Section 10(14)(i) of the Income-tax Act, 1961 (Act), any allowance or benefit granted to the employees to meet expenses wholly, necessarily and exclusively towards performance of official duties (normally referred to as per diems) are exempt from tax, provided such an expense is actually incurred.
Not required to be reported.

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pavan

pavan (Querist)
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19 November 2019 Sir, thanks for the response.
You have mentioned about expenses occurred towards performance of official duties if they are actually incurred. But what if the per diem is more than what is required for such an expense, whether it is taxed and to be reported or not required.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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20 November 2019 Yes it will be taxed if you report any savings. Normally those receiving such allowance say they have spent more than the amount received and don't report any savings. No record need to be maintained on expenses. Mere declaration is enough.

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pavan

pavan (Querist)
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24 June 2021 Sir,
1. If there are certain savings from the above per diem and they are invested in Mutual funds, how are they reported in the ITR?
2. Is it that payment to be done through the 280 challan for that assessment year (or) Can payment be made in the current ITR mention the details in additional income column?
3. How are the mutual funds savings reported in ITR in general as they are subject to the Long Term Capital Gain Tax?
Please guide me in this. Thanks in advance.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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25 June 2021 1 Show it in salary income.
2 yes pay the tax through 280.
3 Yes, mutual fund investments are subject to long term capital gains.

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