Tax on reimbursements unclaimed
This query is : Resolved
14 February 2008
Sir/Madam
Please resolve:
An employee opts for higher reimbursements in his CTC. The Company accordingly calculates and pays Advance FBT o the same. However at the end of the year the employee fails to produce enough bills/supportings to claim the reimbursements. Would the company be required to pay Income Tax on the excess reimbursements ? Or the payment of FBT would suffice? How would it have the effect from Income Tax point of view?
Please resolve:
An employee opts for higher reimbursements in his CTC. The Company accordingly calculates and pays Advance FBT o the same. However at the end of the year the employee fails to produce enough bills/supportings to claim the reimbursements. Would the company be required to pay Income Tax on the excess reimbursements ? Or the payment of FBT would suffice? How would it have the effect from Income Tax point of view?
Late CA Sampat Jain
(Expert)
14 February 2008
IF THE EMPLOYEE FAILS TO PRODUCE EVIDENCE AND IT IS CONCLUDED THAT REIMBURSEMENT IS NOT PAYABLE TO HIM ......THE EXCESS PAID NEEDS TO BE TFD TO HIS PERSONAL ACCOUNT FOR RECOVERY , REDUCING THE EXPENSE ACCOUNT ........FBT WILL BE PAYABLE ON THE REDUCED EXPENSE ......THE EXCESS FBT PAID CAN BE CLAIMED AS REFUND
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