Reimbursement of expenses by the company

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Purnima Baid (Querist)

06 May 2009 Whether the expenses incurred by the employee which are reimbursed by the company directly in the emplyees salary account will be taxable as part of salary component?

chetan soni

chetan soni (Expert)

06 May 2009 If you take bills for that then this will be taxable for them. In other case you need to deduct the tds.

taxindiaconnect

taxindiaconnect (Expert)

06 May 2009 I do not agree with the expert chetan soni on this. if the payment is being made by the directly to account of the employee agsint the bills submitted for official use, the reimbursement is not taxable in the hands of the employee, hence no TDS. If bills are not their, then the company need to treat that reimbursement as income and deduct TDS on such payments. This is true even if the payment is not made to the salary account but in cash also.

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

06 May 2009 The view expressed by Mr.Rajesh seems to be the correct answer.

O.D.SHARMA

O.D.SHARMA (Expert)

06 May 2009 Yes,Mr.Rajseh is right

CA Avinash Haldia

CA Avinash Haldia (Expert)

11 May 2009 There seems to be some confusion in the replies given by the experts. Any reimbursement of expenditure is not taxable in the hands of employees- Whether there are bill or not. In India you will not get bill for local taxi, rickshaw and even for small expenditure on photocopies, newspapers, magazines, etc. The company needs to take a declaration from the employee that the expenditure claimed has actually been made and there is no element of savings in the hand of the employee. If there is a saving in the hand of employee then tax is to be deducted on that amount.

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