How to pay for reimbursements?

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 September 2014 Hello Sir,

We are a starup firm and have come up with the following salary staructure or one of the employees.
Per Annum (Rs) Per Month (Rs)
Basic Salary 3,60,000 30,000
HRA 1,80,000 15000
LTA 25000 -
Conveyance Allowance 9600 800
Special Allowances 66,000 5500
Sub Total 6,40,600 51,300
Reimbursements :
Medical 15,000 1250
Communication Expenses (Telephone & Internet) 18,000 1500
Meal vouchers 26,400 2200
Sub Total 59,400 4950
Total compensation 7,00,000 56,250 (per month)

1.) Can LTA be fiven every month (25000/12) or at the year end only?
2.) how the medical reimbursement is to be given?.
a) As and when the employee produces medical bills.
or b) we give him each month, just that for the month no bills are produced we deduct taxes and pay him.

3.)Similarly for telephone & internet reimbursements?how to be given?

Also is there a limit on the amount that is taxfree for telephone & internet reimbursement?

Thanks & regards

CA Parul Saxena

CA Parul Saxena (Expert)
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04 September 2014 Telephone and internet expenses reimbursed by your firm are taxable in the hands of employee.
Reimburse medical expenses on production of bills by employee and the same are also taxable in the hands of employee.
its upto you whether you give LTA on monthly/annually and again same are taxable in the hands of employee.

Querist : Anonymous

Querist : Anonymous (Querist)

04 September 2014 Thanks for the revert Parul, but given our case won't the amunt of 1500 per month be taxfree for employee incase he produces the bills for the same?

CA Parul Saxena

CA Parul Saxena (Expert)
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04 September 2014 yes medical reimbursement upto Rs.15000 are exempt in the hands of employee.

Querist : Anonymous

Querist : Anonymous (Querist)

04 September 2014 No,i am asking about the telephone& internet reimbursements of 1500 per month. incase the employee produces bills for this, will this amount be tax free?

Querist : Anonymous

Querist : Anonymous (Querist)

04 September 2014 No, not medical, i meant to say telephone & internet reimbursements of 1500 per month. incase the employee produces bill fr same this amount is tax free?? right.
b.)

CA Parul Saxena

CA Parul Saxena (Expert)
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04 September 2014 it is taxable irrespective of amount

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