Telephone Bills Employee Reimbursement
This query is : Resolved
Naveen Sharma
(Querist)
22 July 2016
If employee used telephone connection(Tata,Airtel,Vodafone etc) with mention his name on the bill and company pay bill amount directly to telephone company. So there is any issues in accounting.
please let me know
Naveen Sharma
(Querist)
25 July 2016
can someone let me know about this
02 August 2025
Hey! Here’s a quick rundown:
If the telephone connection is in the employee’s name but the company pays the bill directly to the telecom provider (Tata, Airtel, Vodafone, etc.), **there’s no accounting issue as long as:**
1. The phone is used for **official/business purposes**.
2. The company has a clear **policy or agreement** stating that such payments are business expenses.
3. The company **documents the payment properly** (showing it’s for employee’s official use).
**Why it’s okay:**
Even if the connection is in the employee’s name, since the company is directly paying the vendor, it’s treated as a business expense and should be recorded accordingly.
**Important:**
If this arrangement is only for certain employees without a uniform policy, tax authorities might view the payment as a **perquisite or personal benefit** for the employee, which could have tax implications.
---
If the telephone connection is in the employee’s name but the company pays the bill directly to the telecom provider (Tata, Airtel, Vodafone, etc.), **there’s no accounting issue as long as:**
1. The phone is used for **official/business purposes**.
2. The company has a clear **policy or agreement** stating that such payments are business expenses.
3. The company **documents the payment properly** (showing it’s for employee’s official use).
**Why it’s okay:**
Even if the connection is in the employee’s name, since the company is directly paying the vendor, it’s treated as a business expense and should be recorded accordingly.
**Important:**
If this arrangement is only for certain employees without a uniform policy, tax authorities might view the payment as a **perquisite or personal benefit** for the employee, which could have tax implications.
---
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