EXPENSES BORNE BY SUBSIDIARY COMPANY, FEMA

[saurabh jain]

A NRI (Employee of holding company) is on visit subsidiary company(On Business VISA) incorporated in India. And subsidiary company want to borne the expenses on hospitality (Rent of House) of NRI.(There is no provision in MOA or AOA of subsidiary company incorporated in India regarding Payment of such expense)

What are the various compliance to be followed before making such payment(Such expenses are to be booked in Indian company books and the same is not reimbursed by foreign holding company)
and what will be tax treatment of same in hands of Employee and Subsidiary Indian company  

Posts / Replies

[Rama Krishana]

In case the expenses are being incurred in India, nothing is taken out, no foreign exchange is involved, as per my view FEMA does not put prescribe any guideline or condition or restriction.

If you find any contrary, please let me update, since it my preliminary view only.