Per-Diem to Employee

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sanath (Querist)
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02 June 2011 it is common practise in a lot of cos especially IT-cos, to pay a per-diem allowance to their employees who travel abroad on the basis of no of days they stay abroad. And this per diem is over and above the actual expenses which they claim against bills.
Should TDS be deducted on this per diem, assuming it's paid per se wout bills etc.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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02 June 2011 The per diem allowance will not be taxed in the hands of the employee hence TDS is not warranted.

Circular No.8 of 2005 has clarified that per diem allowance to employees on tour abroad will not be taxable in the hands of employees even if it is not fully spent by the concerned employee.

sanath

sanath (Querist)
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02 June 2011 dear sir,

Do you know of any case law that says that tax will have to be deducted.,

sanath

sanath (Querist)
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02 June 2011 Also it talks about a situation where FBT was in place, now that FBT is not in place.. do you think the situation changes?

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