Taxability of Foreign Allowance paid in India

[arun das]

Kindly guide on the following issue

1. An official of a PSU was deputed to Japan for a period of 18 months, who is treated equivalent to 'Minister'

2. He was entitled for allowance at par with that of 'Minister'

3. Japanese authority had paid him certain allowance in their currency (which is lower than the amount he was actually eligible for). The amount was received in Japan only.

4. Now, the difference amount is being paid by the PSU to him, in India( Eligible amount , less already paid by Japanese authority ).This is for the period of service at Japan.

Query

Whether the differential amount beng paid now to the official,by the PSU -in India, for the service provided at Japan is taxable or not?

[KASTURI SETHI]

Whether your query is about applicability of GST on the differential amount ? Title indicates that the query is about Income Tax. P. confirm.

[arun das]

Sir. Its about applicability of Income Tax .

AI Summary

Taxability of foreign allowance: whether differential payment made in India for overseas service is taxable under income tax. Whether a differential allowance paid in India by the PSU to an employee for service rendered in Japan is taxable under Indian income tax law; facts show part payment was made abroad by a foreign authority and the employer pays the shortfall in India, raising questions about characterization as taxable salary/allowance and the operation of source and place of performance rules.