I'm a central government employee. I'm on deputation outside India for 3-months. During these 3-months I get subsistence allowance per month from the organization where I'm deputed. Does this income is taxable when I return back to India?
RE:Tax on Subsistence Allowance paid outside India
by Amitabh on May 02, 2007 04:06 PM Permalink
The allowance being given to you is not being given by the government,so the advantage of Sec 10 (7) cannot be taken.It is being given by the organisation you are working for.Sec 10(14) also exempts certain allowances to the extent they are used for the specific purposes for which they are given like conveyance allowance,daily allowance on tour,uniform allownace,professional updation allowance,etc.he list of such allowances are given in rule 2BB.But this allownace is not mentioned there.So it is taxable.More so because you have gone there for only three months so you are Indian resident.If this allowance is also being taxed in the country where you are earning it,you can take advantage of the double taxation avoidance agreement if any exists between India and that country,or if not,you can get relief under Sec 91,which provides for the unilateral relief for doubly taxed incomes where no DTAA exists.The relief will be the tax calculated at this income at the Indian rate or the rate in the country where it is earned,whichever is lower.More comments on such typical questions are welcome.
RE:Tax on Subsistence Allowance paid outside India
by Deepak Patel on May 03, 2007 03:20 PM Permalink
From Rule 2BB: "any allowance granted for encouraging the academic, research and training pursuits in educational and research institutions" What does this means? I'm also deputed to research organization outside India, and doing research there. Is still my income taxable?
RE:Tax on Subsistence Allowance paid outside India
by Amitabh on May 03, 2007 05:23 PM Permalink
If you are not a resident of India,your income earned and received outside India is anyway not taxable in India.This allowance under rule 2BB means any allownace granted for academic,research,training etc given by a suitable name indicating the purpose is exempt from tax to the extent it is actually being used for the purpose.If from my general salary I spend some amount for this purpose,I wont get any exemption.
