Hi,
I work for an IT company in India. And i am deputed for 5 and half months to europe to work for the parent company in europe. I get my full indian salary into my indian bank account.
My accomodation in europe is taken care of by our company itself. I also get per diem allowance which is 64 euros per day for the period of my stay here. Until April 1st 2010, as per the policy in our organization, per diem amount was not taxable.
However, starting from April 1st 2010, we got a new policy document that states "The per diem is taxable in the hands of the employee". And disgustingly not a single person in our accounts section gives correct information about tax calculations. I hope this forum will help me to find the answer.
1) The reason for change in organization travel policy is not sure anyways to me. But is that something related to FBT abolishment?
2) Our accounts dept. people told me that the whole per diem amount i get for my period of stay in europe (5 and half months) will be added to my CTC in india and will be applicable to TDS. I wonder if this is correct as i have many friends working in other companies whose per diems are not taxable.
3) Is it so that only unspent and saved per diems taxable in india? And for the amount that we spent for living expenses while at a forign country we get exemption for tax?
Appreciate your patience.
Thanks in advance.
