Tds cut on relocation expenses

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This query is : Resolved

Saransh (Querist)

01 August 2013 Hi,

I newly joined an organization where i was entitled for relocation expenses. I provided all the respective expense bills, But i got the amount reimbursed after deduction of TDS on it.

The company is saying that the expense incurred during Transfer of existing employees is non taxable.
But the criteria is not true for the new employee's relocation. So they have to pay the TAX on the relocation reimbursements.
Please Clarify on my query.

Thanks

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

02 August 2013 TDS is never applicable on reimbursement of any sort of exp.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)

01 September 2013 If as per the terms of your appointed you are entitled for re-location expenses then it is not a income as you are getting the money for expenses incurred by you and no TDS is required to be deducted.

But if there is no clause in the appointment letter then this is your income and you have to pay the tax as it is your additional benefit and accordingly the company can deduct the TDS

So, better you take a letter from the head of the company in addition to your letter of appointment that in addition to the salary and other benefits all relocation expenses shall be born by the company to avaoid any difficulty and controversy.

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