Relocation allow-taxability

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 February 2013 Actually we have paid transfer + relocation allow to an employee as we knw transfer allow is fully taxable whereas relocation allow is subjected to the bills submitted but the employee have spend over and above the amt given as relocation exp. now he argues that relocation allow should be fully exempted and the rest amt should be adjusted to the transfer allow and acc to deduct tax...
i have searched in all websites whether any rule is being implemented but i cant find any

Can anybody help????????

Santosh Mishra

Santosh Mishra (Expert)

27 February 2013

I assume transfer allowance is one time payment made to employee along with relocation allowance.

Transfer allowance as been defined as under

“In this connection it is to be noted that as per section 10(14) read with rule 2BB any allowance granted to meet the cost of travel on tour or on transfer includes any sum paid in connection with transfer, packing and transportation of personal effects on such transfer shall be exempt.”

Hence, employee is correct, excess amount should be adjusted with his transfer allowance.

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