20 November 2010
Dear Sir My doubt regading the salary structure of a company. The company pays basic pay , DA , HRA and Pf etc and debit to salary and wages account. But in addition to that it also pays aum of Rs 25,000/- p.m as reimbursement of conveyances and reimbursement of house rent to some of its employees and debited to other expenses head like reimbursement of house rent and travelling and conveyance head. Is this treatment is correct ? and what are the consequences for violation of law .? Please Guide me. Regards
20 November 2010
There is no violiation of law from the point of employer. It can pay to the employees for reimbursement of conveyance & house rent, but there shall not a fixed amount every month. From companys point of view, all are treated as expenses.
20 November 2010
But sir reimbursement of house rent is a perk and tds u/s 192 is required to be done.and if we debit under orher expenses head then how we can take care of tds ? and if tds is deducted then it has to be done in 194I not 192.Pls sir guide me in this regard
20 November 2010
But sir reimbursement of house rent is a perk and tds u/s 192 is required to be done.and if we debit under orher expenses head then how we can take care of tds ? and if tds is deducted then it has to be done in 194I not 192.Pls sir guide me in this regard
21 November 2010
Fixed amount per month paid by employer to employee can not be treated as reimbursement, it is allowance, and allowance is a part of salary and should be consider for TDS.
If payment is nature of reimbursement than house rent (NOT conveyances)should be include in salary and subject to TDS as per rule.
Sec 194I not apply because in this case payment made to employee not to landlord. If payment directly given to landlord than TDS should be deducted u/s 194I and value of rent free accommodation (as per rule)should be include in employee's salary and consider for TDS.
CAclubindia
