Amount in form 16

Others 512 views 4 replies

Ravi Ranjan

31 Points Joined July 2013

Hello,

I am looking to have expert advice on a query i have regarding form 16 i have received from my employer. The issues is that the total amount mentioned under "Gross Salary" is much lesser than the actual income received as Salary during the last FY2012-13.

When enquiring they say that some components such as "Medical Exp", "Uniform Exp", "Tel Exp" are considered as "Re-imbursement" rather than "Income". So these components have been removed as part of your total gross income.

I am not satisfied with their reply. Can someone help me, so that i can reason with them because i believe my Form 16 income should contain the "actual figure" rather than lowered income. The lowered income may cause problem in Loan Eligibility as well.

Please help me!!

Thanks,

Replies (4)

CA Raviteja

Risk Management

585 Points Joined December 2008

What the company said is correct. This is because -

Certain part of your gross salary includes 'Flexible Reimbursements', which are tax free. They include Telephone reim, Medical exp reim, uniform reim, academic development reim, etc. The company will not deduct tax on such amounts if you submit necessary bills. Also, it will not be included in your income.

Technically, the amount which you are receiving is not income. The expenditure you met, is reimbursed by the company. So, the amount u recd is not included in gross income.

If, however, you want that amount also to be included in Gross income, you should request your company to include them in your Gross, and the company will deduct tds on it.

Ravi Ranjan

31 Points Joined July 2013

Thanks CA Raviteja!! But should not these amount covered as "value of perquisites u/s 17(2) in Form no 12BA"?

SO that the total Gross Salary comes as the actual amount paid to "Employee" rather than "Already paid - minus- reimbursed"!

Please clarify! because I believe that the Gross Salary should show the "actual amount" and then the "deduction of the allowances to the extent exempt u/s 10".

Thanks.

CA Raviteja

Risk Management

585 Points Joined December 2008

No, perquisites include rent free accommodation, car provided by company, etc.

They are not reimbursements. However, telephone exp, and others mentioned previously are reimbs.

Saying that, i, personally do agree that those allowances must be included in gross salary and shown as deduction u/s 10. But some companies (including mine) do not include them in gross pay.

Ravi Ranjan

31 Points Joined July 2013

Thanks again RaviTeja. Can you please confirm what are those allowances that can be shown as deduction u/s 10 in Form 16. bcoz as per company only "HRA" and "Conveyance" (Rs. 800 pm) can be dedcuted u/s 10.

Please let me know if they can put "telephone", "food", "Uniform" and any such exp. under the head of "u/s 10 deduction" within the Form16.

Look forward to hear from you.