FIXED ALLOW. IN SALARY STRUCTURE

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This query is : Resolved

Prince George (Querist)

16 October 2009 Hi Freinds,

Will there be any income tax liability on the employee if FIXED amount of Uniform allow,Conveyance allowance(for official purpose),helper allowance,and medical reimbursements forms part of the salary structure.But the employees are providing supportings for all of them and getting reimbursed.

Regards

Prince

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)

18 October 2009 All fixed allowances are taxable as components of salary in the hands of the employee.

All reimbursement of expenses are treated as perquisites and has to be calculated for each item.

Prince George

Prince George (Querist)

18 October 2009 Thank You Sir.

But I wanted to understand then how can one take exemption of allowance u/s 10(14).Which provides for exemption to the extent the expenses ,like uniform,conveyance,helper ,are incurred for official purpose.
Do you mean that we need to take the exemption separately without it forming part of salary structure.

thanks

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)

18 October 2009 Under each head you have to calculate the disallowance.

EG: Uniform allowance : 17000
(-) Less Spent : 7000
-------
Taxable 10000

Conveyance : 1000
(-) Spent : 600
-------
Taxable 400

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