Taxabilityreimbursement of transportation exp. on relocation

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Ramesh (Querist)
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29 March 2012 Dear All,
Please advise whether the amount reimbursed to employee incurred by him on travelling and transportation of household items on transfer from one place to other place (from company a to company b) is taxable in the hand of the employee. Please give some reference of case law, if available.
with warm regards,
ramesh

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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29 March 2012 Such reimbursement is not taxable in the hands of the employee since the expenditure has been incurred for official purpose, provided the company has a policy that shifting expenses shall be paid by the company to its employees.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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29 March 2012 As per Rule 2BB read with Sec 10(14), any expenses incuured on tour or travel or TRANSFER shall be exempt.
Exemption will be lower of the following -
i) Amount received as reallocation expenses.
ii) Amount incurred by the employee.
Therefore ,if employer has reimbursed actual expenses than nothing is taxable.
However, if employee has not incurred all the expenses then excess amount shall be taxable.

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