Pls...urgent...taxability of daily allowance

Sowmya.G (CA) (459 Points)

13 July 2011  

Anybody Pls resolve my query.its very urgent...My cousin is working in a software company.He is on a temporary assignment for a client in Canada. He is getting the Indian salary.However he and his spouse are paid a daily allowance (maintenance) for meeting the day to day expenses in Canada.The co neither deduct any tax nor pay it out of its own hands.What should we do with this allowance?Whether it should be included in salary income? The co in India deducts tax on the salary paid by it..