Taxability of DAILY ALLOWANCES ???

it will be exempted to the extent of expenses incurred & remaining will be taxable

daily allowances are exempt us 10(14) of the lower of the following:-

a)amt utilised for official purposes.

b)amt of allowance

also its always the duty of the assesee to prove that he can claim exemption ander any sec so he shall make a record of expenses

Dear Jinesh & Pranav,

Thanks for reply.. but I have already told you very clearly that NO BILLS OF EXPENSES ARE SUBMITTED & its not cost effective for the company to verify such bills of very small amount.. Think little bit practically..

As per my understanding, this will be fully taxable in the hands of employee becoz no bills are available of actual expenditure..

Dear Adarsh,

               I dont think I.T. Act has prescribed the ways in which u can prove an expenditure to be official. When the act is silent, interpretation cannot be made that bills are necessary for getting the allowance. So, u can claim the actual expenditure as an allowance.  In the case of assessment, the A.O. will give due importance to the circumstances and allow u deduction, even on the non-availability of bills 

Fully taxable in the hands of employees because its allowance by name itself.

Daily 'Allowances' 

NO BILLS ARE SUBMITTED TO THE COMPANY FROM THE EMPLOYEE

Employee can avail exemption u/s 10(14)(ii)

As per section 10(14)(ii)

any such allowance granted to the assessee either to meet his personal expenses at the place where the duties of his office or employment of profit² are ordinarily performed by him or at the place where he ordinarily resides, or to compensate him for the increased cost of living,

daily allowance upto rs 50 will be exempt if fooding is provided to its specified location and proofs are there otherwise taxable................