Understanding Section 10(8B)
Section 10(8B) provides tax exemption for income received by:
- Foreign employees
- Foreign consultants
working in India under approved technical assistance programsfunded by:
✔ Foreign governments
✔ International agencies
Key Features
✔ Who Can Claim?:
- Non-resident individuals
- Foreign government employees
- Experts from international organizations
✔ Exempt Income Types:
- Salaries
- Consulting fees
- Allowances
- Any program-related remuneration
✔ Approval Requirement: Must be part of government-notified technical assistance program
✔ Exemption Scope: 100% exemption on India-sourced program income
Practical Example
Scenario
Mr. Tanaka (Japanese national), a JICA-funded urban planning expert in Mumbai:
- Program: Japan-India Smart Cities Mission (approved by MoHUA)
- Duration: 2023-2025
- Compensation:
- Monthly fee: ¥500,000 (≈ ₹3 lakhs)
- Housing allowance: ₹1.5 lakhs/month
- Project bonus: ₹5 lakhs/year
Tax Treatment
- All payments(fees + allowances + bonus) → 100% tax exempt under Sec 10(8B)
- Condition: Program must be notified by Indian government
- Result: Mr. Tanaka pays zero Indian taxon mission-related income
Comparison with Similar Sections
| ASPECT | SECTION 10(8B) | SECTION 10(8) | SECTION 10(8A) |
| Funding Source | Foreign govt/agency | Bilateral programs | International orgs |
| Beneficiary | Foreign consultants | Any experts | Non-Indian only |
| Approval Type | Program-level | Project-level | Organization-level |
