Taxability of Daily Allowance

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ankur (Querist)
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29 July 2008 Please advice me on the taxability of Daily allowance paid by an Indian company to its employees on duty outside India for meeting expense on food etc.This allowance is fixed irrespective of the expense. This payment is made to employees by a hotel in that country. The hotel raises the invoice to the Indian Comapny.This payment is finally made by Indian Company to the foreign hotel.
Advice on the taxability in the hands of employer/employee/hotel.
Is any withholding of tax required?
Also advice on the FBT aspect.

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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30 July 2008 The daily allownce which is spent for the intended purpose of boarding, lodging and local travel and communication is not taxable only if it is so spent.
FBT is applicable to the company

ankur

ankur (Querist)
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30 July 2008 But what is the reason?
does it fall under section 10(14), if so why?

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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31 July 2008 See Rule 2BB(1)of Income Tax Rules.

ankur

ankur (Querist)
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14 August 2008 I M SORRY TO SAY U R WRONG.
IN RULE 2 BB (1) u hav to submit actual bills.
this is not the case here.