Section 10(10cc)

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kranthi kumar (Querist)
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29 March 2019 GREETINGS,

Our company decided to reimburse the tax paid by the employee on non monetary perks (house accommodation), first TDS will be deducted from the salary of the employee including non monetary perks and then the portion of the tax on non monetary perks will be calculated and reimbursed to employee through salary on quarterly basis.

My query is whether reimbursement of tax paid by the employee , by the employer comes under section 10(10cc)?

thanks in advance.

Rajesh Kumar

Rajesh Kumar (Expert)
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29 March 2019 The perquisite falls under Section 17(2), and hence if the employers pays the taxes on its own at his option [no legal compulsion], the employee shall get benefit and such tax payment shall not form part of the total income of the employee. Thus, reimbursement of such taxes paid should fall under Section 10(10CC).
The only problem is that the relevant section uses the term "taxes actually paid by the employer on behalf of the employee". In the present case the employer is not actually paying the tax, merely reimbursing the amount of tax paid by the employee. Thus, there can be an objection from the revenue.

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