International · allowance
Foreign allowance on overseas posting
Fully exempt for Indian citizens who are government employees posted abroad; taxable for private employees.
How the taxable value is determined
Perquisites and allowances paid outside India by the Government to a citizen of India for services rendered abroad are exempt. Private-sector foreign allowances follow ordinary salary taxation and residency rules.
Regime availability
- Old regime
- Available
- New regime
- Available
Documentation to keep
Posting order and evidence of residential status for the year.
Legal basis: Section 10(7), Income-tax Act
Frequently asked questions
Is foreign allowance on overseas posting taxable in India?
Fully exempt for Indian citizens who are government employees posted abroad; taxable for private employees. Perquisites and allowances paid outside India by the Government to a citizen of India for services rendered abroad are exempt. Private-sector foreign allowances follow ordinary salary taxation and residency rules.
Does the exemption apply under the new tax regime?
Under the old regime this treatment is available; under the new regime it is available. Legal basis: Section 10(7), Income-tax Act.
What records should I keep for foreign allowance on overseas posting?
Posting order and evidence of residential status for the year.
Related tools & guides
Reflects provisions in force for FY 2026-27; verify against the latest government publications (incometax.gov.in). Information, not tax advice.