While moving on a business trip to abraod location, employee gets forex as daily allowance.
Legally its like daily allowance and is not taxable as per India or foreign tax laws UNLESS spent as a whole at business trip itself. But most of time we bring some forex back as our savings. :)
Here the story begins.. Now as you have not spent the amount at your foreign trip, you need to pay taxes on that (Legally). But most of the people don't follow it.
This can bring you under the scrutiny, so here are some tips to play safe -
1. Before travel, keep some money here in india itself after discussion with your other colleugues abroad. Most of the time, total amount is not required. Why to carry more, if less is more than enough.
2. Prefer to spend Travellers cheque (TC) on business trip first and then switch to cash. TCs are more subject to legal catch as you need to necessarily submit your passport & other details to encash them.
3. On return to india, exchange forex as and when required and avoid encashing big amount in one go.
4. Keep withdrawing some amount from your salary account too. Don't depend on forex totally for daily expenses.
5. Don't deposit big amounts in your account at once, divide it in chunks of < 50000 and deposit then.
6. Prefer to exchange money with local vendors and avoid banks for two fold advantage. First, you will get good exchange rate and second you need not to show documents if you have good understanding with vendor.
