MSMEs can continue to avail non-tax benefits post re-classification: Govt Relying on the provisions of the Income Tax Act these allowances were considered as exempt from tax in India and hence the employer did not deduct any tax on the same. The employees continued to receive salary in India and, in addition, boarding and lodging allowances were paid in the UK. The company had its branch office in UK and deputed employees to its branch office. Accordingly, any unspent amount of per diem allowance is taxable in the hands of employee and tax deduction is required to be done by the employer.Ī recent ruling of the Andhra Pradesh High Court has held that boarding and lodging allowances paid to employees deputed abroad for meeting personal expenses is taxable as a perquisite and the employer is liable to deduct tax. Iii) The employee has actually incurred the expensesīased on the above provision, tax exemption is available only to the extent the per diem has been actually spent by the employee. Ii) The allowance is provided while on ‘tour’ and away from his normal place of duty I) The allowance is a special allowance, specifically granted to meet expenses wholly, necessarily and exclusively in the performance of duties Pharma Industry Conclave Unlocking opportunities in Metal and MiningĪs per the provisions of the Income Tax Act, per diem allowance received by an employee is not taxable, provided the following conditions are satisfied:.Deloitte Best Managed Companies 2022 Sustainability 100+.
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