A company pays Professional update allowance for scientists/Engineers in the grade of SO/C and above every year from the year 1998-1999 as per the DAE order dated 3rd February, 1999 to enable them to keep themselves up-dated in the field of Nuclear Science and Technology and related fields and widen their horizon. This was further extended with effect from 2002-2003 to the other categories of personnel in the Department who render support functions, for carrying out their role in an effective manner and thereby supporting the sustained excellence of DAE in its science and technological activities.
It is kindly requested that your expert opinion in this regard for the following doubts may please be offered:
1) Whether the above said update allowance is taxable in the hands of
the employees?
2) Whether it is exempt under the provisions of the Income Tax
act, if so, the details may be furnished
3) Whether this can be classified under any category of Fringe
Benefit tax, and accordingly, whether FBT shall be paid by the employer?
4) What are the implications of applying FBT on this expenditure,
if it is taxable in the hands of the employee?
Also if anybody could give me the link to the DAE order dated 3rd February, 1999 as mentioned above,i'll be grateful.
Please reply as soon as possible.Thanks in advance!!
CAclubindia
