Understanding Tax Implications: Is Your Employee's Daily Allowance Abroad Taxable?

Hi Folks,

We have an employee working abroad to whom we pay $50/day as a daily allowance. Every month, he gets a $1500 salary in addition to the allowance.

I want to know if this daily allowance is taxable according to our Income Tax laws and, if so, under which section of the IT Act.

Regards,
Anuradha

Hi folks,

We have an employee working abroad to whom we pay $50 per day as a daily allowance. Every month, he gets a salary of $1500 in addition to the allowance.

I want to know if this daily allowance is taxable according to our Income Tax laws, and if it is, then under which section of the IT Act.

Regards,
Anuradha

DA is not taxable. This DA should be deposited in employees' current accounts, not in the salary account, in order to save them from a tax point of view.

Thanks,
HRBuff