Tds on travel reimbursement
This query is : Resolved
20 February 2015
Is there any TDS to be deducted for the travel allowance paid by a company to an employee?
Say a company sends his employee to foreign country and gives fixed allowance of 400 USD for 4 days and transfers to his Indian account in Rupees. So while making this reimbursement do we have to deduct tax on it? The company does noyt ask for any bills since it has a company in abroad and they send these employees to their Head office.
Say a company sends his employee to foreign country and gives fixed allowance of 400 USD for 4 days and transfers to his Indian account in Rupees. So while making this reimbursement do we have to deduct tax on it? The company does noyt ask for any bills since it has a company in abroad and they send these employees to their Head office.
20 February 2015
No TDS required this being reimbursement of traveling expenses on official duty.
If an amount is saved by the employee and is deposited/invested and or is otherwise shown as such by the employee, then he would be liable to tax on the unspent amount of the allowance.
Under the Rule 2BB IT Rules 1962 allowance which is completely exempted from tax is the daily allowance, whether granted on tour or for the period of journey in connection with travel, to meet the ordinary daily charges incurred, by the employee on account of his absence from the normal place of duty. There is no monetary limit on the exemption of this allowance but any allowance which is reasonable for the employee’s work or the employment, and which is granted to meet expenses wholly, necessarily and exclusively incurred for the purposes of the, duties of an office or employment of profit, would be exempted, provided it is actually spent by the employee concerned.
If an amount is saved by the employee and is deposited/invested and or is otherwise shown as such by the employee, then he would be liable to tax on the unspent amount of the allowance.
Under the Rule 2BB IT Rules 1962 allowance which is completely exempted from tax is the daily allowance, whether granted on tour or for the period of journey in connection with travel, to meet the ordinary daily charges incurred, by the employee on account of his absence from the normal place of duty. There is no monetary limit on the exemption of this allowance but any allowance which is reasonable for the employee’s work or the employment, and which is granted to meet expenses wholly, necessarily and exclusively incurred for the purposes of the, duties of an office or employment of profit, would be exempted, provided it is actually spent by the employee concerned.
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