Hi, I would like to know if, apart from my TDS deduction from my basic salary, the allowance paid to me on any business tour, whether abroad or domestic, will also be applicable for TDS deduction?
Certain allowances are exempt subject to a limit. Reimbursements are not taxable.
I have made corrections to the spelling and grammar errors in the user's input. Additionally, I have ensured proper paragraph formatting with a single line break between the two sentences.
There is a provision in the Income Tax Act that states any special allowance provided specifically to cover additional expenses incurred by the employee due to their job or place of work will be exempt.
However, an allowance given for a foreign trip, as distinct from reimbursement of expenses, may not be covered under this clause. You need to speak to the accounts department of your company and consult your Chartered Accountant (CA) if necessary to get clarification. The exemption or taxability would depend on various factors and the method of computation of the allowance.
Allowances are treated as income, and reimbursements are also considered as income. Therefore, allowances paid can be added to your total income and are liable for TDS.
I think you mean to say reimbursements are not treated as income, provided there is proof of expenditure having been incurred.
A S Bhat
If you are knowledgeable about any fact, resource or experience related to this topic - please add your views. For articles and copyrighted material please only cite the original source link. Each contribution will make this page a resource useful for everyone. Join To Contribute