What is tax on allowance covering expenses paid by Indian Company to its employee & if brought back as saving?

Question

Situation : expense paid by Indian Company to its employee when he is sent abroad & if a part is brought back as savings. What is tax on same when
(i) individual becomes NRI
(ii) individual is as a resident

Answer 1

I saw this reply in the following link:
A resident Indian is chargeable to tax on all income earned by him. So the allowance received is taxable. However, he is eligible for a deduction under Section 80RRA, of up to 75 per cent of the amount remitted by you into India within six months from the end of the financial year. This deduction is available only if you are a technician as defined under explanation © to sub-section (2) of Section 80 RRA and, further, the terms & conditions of your service outside India are approved in this behalf by the Central government or the appropriate authority. The balance 25 per cent is taxable at the marginal rate of tax.

Similar situations have also been explained in details. In short, if the earnings are repatriated after he attains an NRI status then it is not taxable. If he is resident indian, it is taxable.
more cofusions;
if the salary is paid abroad it is not taxable, but paid by an indian employer it is taxable.

however see this link:
http://nrifinance.rediff.com/taxationedit1.asp

Answer 2

you're maximum surprising. while you're no longer paying taxes into the equipment then you definitely are no longer accumulating social protection credit or earnings in direction of retirement. And looking on different factors, this would result your ability to qualify for Medicare. additionally the corporation will pay into the equipment besides. there is not any blanket exemption for workers of non-earnings. workers of church homes, workers of colleges who're additionally scholars, and the Amish would desire to be the only ones no longer paying FICA taxes. additionally contractors have not got the taxes withheld from their paychecks, yet pay it with their tax return. you mustn't be required to return up with a tens of hundreds of dollars verify rapidly. in the event that they do come to a decision, you will take transport of time to pay up. and you would be wanting that paid in for once you retire.

Answer 3

When such amount is brought back it can be taxable so it is advisable to spend the same outside India.
This news on the link below will be of interest to you
http://www.allindiantaxes.com/ait-news-55.php

No TDS on salary to non-resident employees
AIT News Network
NEW DELHI. Authority for Advance Rulings(Income-Tax) vide a recent ruling AIT-2006-249-AAR has ruled that the salary paid by the Company registered in India to non-resident employees for rendering services outside India shall not be taxable in India if the same has been offered for tax in the UK in pursuance of the DTAA.
T H E F A C T S:
The applicant company registered in India under the Companies Act 1956 and itself a resident in India within the meaning of section 6 of the Act, it raised certain issues relating to the tax liability of some of its non-resident employees lent to group companies abroad. The applicant sought advance ruling of the Authority on the following questions :

(i) Whether in the facts and circumstances of the case and in law, salary income received in India by Mr.Manish Gupta from British Gas India Private Limited for rendering services outside India is taxable in India?

(ii) Whether in the facts and circumstances of the case and in law, British Gas India Private Limited is required to withhold taxes on salary paid in India to Mr.Nipun Pradhan and Mr.Manish Gupta for rendering services outside India?

The applicant stated that it is a part of BG Group, a leading international energy company which deals in all kinds of natural gases. India is one of BG Group’s six core geographic areas of operation. The applicant is responsible for managing and developing upstream and downstream interest of the Group in this country. The applicant lent some of its employees to BG Group entities outside India.

T H E R U L I N G:
(i) The salary paid by the applicant to Mr.Manish Gupta shall not be taxable in India, if the same has been offered for tax in the U.K. in pursuance of the DTAA.,

(ii) The applicant shall not deduct tax at source from salary paid to Mr.Nipun Pradhan and Mr.Manish Gupta in India, provided it is satisfied from the details and particulars furnished under section 191(2) that taxes have been paid on such payments in the U.K.

( Click here for full text of Ruling AIT-2006-249-AAR )