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Taxability on Reallocation allowance from foreign country.

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This query is : Resolved

CA Harsh Shah (Querist)

07 January 2021 One of my client was shifted to Nigeria for job in March 2020. As part of his contract he has received $15,000 as Joining bonus, which is actually reallocation allowance to meet his expenses in Nigeria (West Africa). On above Income no Tax has been deducted in that country, but on his salary Tax at 20% has been deducted. Company has shown $15,000 as operational expense in its books of account in Nigeria and treated as expense.

India has no DTAA with that country.
My question is
1.Whether receipt of $15000 will be fully taxable in India or Exempted ?
2. If taxable, for determining taxability which date should be considered, date of Accrual or date of receipt?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

08 January 2021 Income tax exemption on relocation falls under Section 10 (4), 1961, and under Income-tax rules, Rule 2BB, 1962. ... The specified expenses incurred due to the transfer, i.e., the relocation allowance can be claimed as tax exemption.

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