Getting Per diem in USA but company only making food bills as tax exempt


(Anonymous) #1

I am getting per-diem in USA.

My company says that as long as I give bill, eg lunch bill per diem won’t be tax.

I could not find what type of bills I can give.

Company says only food is tax exempt, and if I go for a movie for example, it is not.

What do tax laws say?


(Anil Gupta) #2

Per diem is paid to help an employee meet his daily expenses incurred while he is on business visit.

It is taxable in India if you save some of it.
Whatever you save and bring to India, will be added to your Indian income and taxed as per your income slab.

If you spend all, then there is no tax in India.


(Anonymous) #3

Hi Anil, my question is different. Can I spend it on watching a movie. Will that be covered? Or only on food. My company thinks its only on food, and nothing else


(Anil Gupta) #4

Are they asking you to submit bills? Normally, no company asks for it. They just pay a lump sum daily per diem and ask for no receipts.

If they are asking for it, then only the business expenses would be eligible. No movie or personal expenses.


(Anonymous) #5

Hi Anil, we get Per Diem lump sum.

At the end for the amount for which bills are not shown, income tax is deducted.

They say only food bills are tax free. Stuff like entertainment etc, is not tax free and Indian govt takes tax.

I wonder why they cut tax. Shouldn’t it be employee responsibility?


(Anil Gupta) #6

‘Per Diem’ is an expense for your employer and they need to show it in their accounting books. They are responsible for deducting income taxes (TDS).

Some companies just show the whole amount as an expense and expect you to spend it all. If you save anything and bring it to India, it is considered your income.


(Anonymous) #7

Hi Anil, my company taxes it at 30% unless we submit “food” bills.

Without bills, even if we spend it all, it is taxed.

however, from the Kerala high court judgement saying 70-75$/day is reasonable, and no bills required, I wonder why they do it


(Anil Gupta) #8

Not sure why they are doing it.
In fact, I have also not heard any company taxing the per diem abroad.