Understanding Section 10(8)
Section 10(8) provides tax exemption for income received by:
- Foreign technicians/experts
- Employees of foreign governments/international agencies
working in India under bilateral technical assistance programsapproved by the Indian government.
Key Features
✔ Who Can Claim?:
- Foreign government employees
- Technical experts from international agencies (UN, World Bank etc.)
- Their family members (limited cases)
✔ Exempt Income Types:
- Salaries
- Allowances
- Perquisites
- Any remuneration under approved programs
✔ Approval Requirement: Must be part of government-approved technical cooperation program
✔ Exemption Scope: 100% exemption on India-sourced income from the program
Practical Example
Scenario
Dr. Emily Carter, a US-based water conservation expert deployed to India:
- Program: World Bank-funded “Clean Ganga Mission” (approved by MoEFCC)
- Duration: 2 years (2023-2025)
- Compensation:
- Monthly salary: $8,000 (paid by World Bank)
- Housing allowance: ₹1,00,000/month
- Education allowance for children: ₹50,000/month
Tax Treatment
- All payments(₹ salary + ₹ allowances) → 100% tax exempt under Sec 10(8)
- Condition: Program approval proof must be available
- Result: Dr. Carter pays zero Indian income taxon mission-related earnings
Comparison with Similar Sections
| ASPECT | SECTION 10(8) | SECTION 10(6) | SECTION 10(17A) |
| Beneficiary | Foreign experts | Diplomats | Award recipients |
| Income Type | Technical program income | Embassy income | Government awards |
| Approval | Mandatory (program-level) | Country reciprocity | Case-by-case |
