ITR-Foreign Income (Living Allowances)

Hii All,

One of my friend working with TCS, last year he shifted to USA for Onsite Project. Now TCS paying him Salary in USD after deduction of TDS as per income tax act & issuing the Form 16 also, along with this he gets Living allowances on which tax is deducted by company as per USA rules & Living allowances is not considered in form 16.
Now my queries is as follows:-
1. whether living allowances will be consider as income in his ITR?
2. Which ITR form will be used for IT return?
3. Any DTAA will be applicable or not, if yes kindly provide me.