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Living allowance on deputation or for temporarily deployment Outside India not taxable
Case Law Details
- Case Name
- Income Tax Officer Vs Shri Saptarshi Ghosh (ITAT Kolkata)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2006-07
- Courts
- ITAT Kolkata
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Living allowance paid in addition to the regular salaries and benefits in India to the employees of Indian Company who are temporarily deployed in US will be exempt from tax.
Honourable ITAT held that the living allowance was covered under 2(24)(iiia) of the Act on the following grounds:
The deputation agreement between the taxpayers and the Indian Company clearly states that the additional compensation in the US has been paid in lump sum without any reference to meet personal expenses at the place where the duties of office or employment were to be performed. The additional ...
Hi,
With regards to actual spending of the expenditure, the Honourable ITAT relied on Madanlal Mohanlal Narang, wherein it has been held that “it is not open to the revenue to call for the details of expenses actually incurred unless the specific allowance are disproportionately high compared to the salary received by him or unreasonable with reference to the nature of the duties performed by the taxpayer”.
Is there any definition to decide what percentage is considered “disproportionately high” compared to the Indian Salary?