Is there any Tax liability on Allowances in Foreign Country?

Hi,
I am working in an MNC in India but have been deported to one of the Europian Country [NORWAY].
As I have been deported to Norway, I continue to get the salary in India along with allowances in NORWAY.
I pay my tax on salary in India. But is there any tax liability on allowances I get in Foreign country?
I am getting this allowance to take care of my travel and food expenses.
Do I have to pay any taxes in India on the amount saved in foreign country?
I come under 30% Tax bracket.
Also, If I send this saved money to India, do I need to pay tax on this? Or is it better to have an NRI account with some bank?

Thanks for the help in advance.

Your entire salary (Including the allowances in full) will be taxable if you are a resident assessee (If your stay outside India is of less than 183 days). In case your stay outside India is more than of 183 days, you will be treated as a non-resident assessee and only the salary received in India will be taxable in India. In that scenario, the allowances may be taxable in Norway. One needs to take into consideration Norway's Tax laws as well as DTAA between India & Norway. However, normally you would have to pay tax on your entire income including allowances in one country or other.

To save taxes, ask your company to make payment for these so called allowances as reimbursement of lodging & fooding expenses (you will need to produce expense vouchers).

On remittance of savings, there will not be levy of any income tax.

Hi moneygurukul,
I am in Norway from last more than a year. I came in Norway in April 2007. And allowances am getting here is for my self expenses like food, personal travel etc.
Also company is giving me reimbursement for telephone up to certain amount along with monthly bus pass.
Also, company is paying tax on behalf of us as to show the Norwegian government that we are employed here in Norway.

You said: "To save taxes, ask your company to make payment for these so called allowances as reimbursement of lodging & fooding expenses (you will need to produce expense vouchers)."
This is valid only in case I am staying abroad for less than 183 days, right?

Please clarify now.
Thanks for the reply.

Your company is paying tax to Norway Government due to provisions of Noway's Tax laws and not to show to the Government that you are employed in Norway . Taxation has no connection with proof of employment.

About reimbursement, my quote will be valid in any case. However, here in India the company will have to pay FBT on such reimbursement of expenses. No idea about Norway's Tax Rule. Allowances even if they are paid to employees for specific expenses are not tax-exempt unless and untill specifically exempted by the tax laws.