Should the Out of pocket allowance paid by employer taxed ?
This query is : Resolved
01 August 2009
Dear Sir,
Our company pays a certain amount as, "out of pocket expense " (OPE) allownace per day basis when we are out of office for work. OPE is expected to cover expenses for which employees/we may not be able to get supporting bills/receipts e.g. porterage, light reading material, snacks, Tips, water and soft drinks etc.
My question is should this amount be included in my income and taxed ?
Our company pays a certain amount as, "out of pocket expense " (OPE) allownace per day basis when we are out of office for work. OPE is expected to cover expenses for which employees/we may not be able to get supporting bills/receipts e.g. porterage, light reading material, snacks, Tips, water and soft drinks etc.
My question is should this amount be included in my income and taxed ?
Abhishek Mohta
(Expert)
03 August 2009
Out of pocket expenses is a sort of Reimbursement of expenses received by the employees from their employer. Reimbursements are not treated as income in Incoe Tax Act. Thus this amount should no be included in your income.
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