Taxation-Creche benefit

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This discussion clarifies the tax treatment of creche benefits provided by employers to employees. While generally considered a taxable perk, it may be exempt under specific maternity benefit provisions, particularly if the Indian Maternity Benefit (Amendment) Act, 2017, is not applicable. Further clarification and supporting documents are requested to confirm the exact taxable and non-taxable portions for employees and employers.

Gorksh Pawar

Gorksh Pawar (Querist)
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06 September 2021 Dear Expert,

I would like to know the taxation impact of the Creche benefit to employees. Company would like to pay between 8000 to 13000 per month.

Kindly advise on below :
1. Is this benefit need to be considered as Income/ Perquisite to employee. Please provide the detailed extract with taxable & non taxable portion.
2. Is there any taxation exemption under Income tax for Creche expenses for employee or Employer.

Earlier response on this is highly appreciated!

Thank you,
GP

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 September 2021 Such creche expenses will not be considered as perks and taxed in the hands of employees. It will fall under maternity benefits exempt from tax.

Gorksh Pawar

Gorksh Pawar (Querist)
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06 September 2021 Dear Sir,

Thank you for your quick response.

Request you please share me some supporting documents. It would be great help.

Thank you,
GP

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 September 2021 Such reimbursement is taxable as perks in case of Indian Maternity Benefit (Amendment) Act, 2017 is not applicable.

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