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Difference between Sec9(1) (iii) and sec 10(7)

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Swetha Yagati

57 Points Posted on 06 November 2020

What is the difference between Sec9(1) (iii) and sec 10(7) of income tax act... One says salary to an Indian for foreign services @ foreign is exempt

... One says it is taxable... Please explain

Replies (2)

Quick Summary

This discussion clarifies the distinction between Section 9(1)(iii) and Section 10(7) of the Income Tax Act. While salary earned by Indian government employees serving abroad is taxable under Sec 9(1)(iii), allowances related to this foreign service are exempt under Sec 10(7). Therefore, only the base salary income is subject to tax in such cases.

Cacs Satish

6 Points Posted on 06 November 2020

If the Indian government employees(should be citizens of India) works outside India as government employees then salary from such services is taxable u/s 9(1)(iii) but all allowances are exempted to u/s 10(7). I.e only salary income is taxable.