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Querist : Anonymous

Querist : Anonymous (Querist)

22 January 2013
Had a few queries:

1.If we hire a trainee for 6 months/one year and he is paid stipend/out of pocket expense is it ok? Does he have to be taken in company payroll and given the statutory benefits. How will his stipend be treated as per income tax law?
2. Can medical reimbursement which is tax exempt upto 15000/- be given monthly? If paid monthly will it be treated for tax purpose as medical allowance?
3. Can LTA be paid monthly? If it is tax exempt once in 2years than can we exempt the employees on production of bills in one year and tax his lta the consecutive year?

@VaibhavJ

@VaibhavJ (Expert)

22 January 2013 Hi,

Yes rainee should be paid with statutory benefits unless they are hired as consultant.

Yes medi. reimb. can be given to them since they are at par with others employee.

LTA i paid monthly then it will be always taxable.

Thanks!!

Querist : Anonymous

Querist : Anonymous (Querist)

22 January 2013 Thanks for the prompt reply.

What about summer trainees? What about their payment. Should they also be paid statutory benefits.

My 2nd query about Medical was an independent query. Can medical reimbursement(Rs.15000/-) for all employees be given monthly (Rs.1250) and medical bills taken by March end. Or will paying medical monthly make it a medical allowance? I read somewhere that medical if given monthly as allowance will make it taxable.

@VaibhavJ

@VaibhavJ (Expert)

22 January 2013 Hi,

Yes all trainees are eligible to avail statutory benefits.

Yes medi claim reimb. can be paid monthly subject to you take a declaration from employee that they will be submitting all supporting in the year end.

Thanks!!

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