Lumpsum relocation received - tax exemption for personal expenses?

Hi all,

I recently shifted jobs from Mumbai to Bangalore. My new company paid me lump sum Rs. 2 Lacs as relocation expenses and charged me tax as per my tax slab. However, I incurred expenses (not paid by employer but by me directly) on i) movers and packers ii) air tickets for me and my wife.

Q1) Can I claim this as income tax exemption?

Q2) Will I need to submit these bills to my employer or can I claim those directly in my tax return in next assessment year?

Q3) If I can file directly in tax return, under which head and how do I provide proofs to government?

Thanks,

Ankit

Replies (5)

1. Not possible, when the employer has already considered it as remuneration and deducted tax.

2. Not beneficial, unless the employer had considered it as its own business expenditure.

3. Follow form 16; if it is deductible, HR will consider it it accordingly.

Such expenses reimbursement of 2 lakhs will be treated by employer as per terms of your employment. Amount will reflect in Form 16 at year end . Anything related to this you need to discuss with Employer.

But you will be required to show salary income as per Form 16 compulsorily in your return of income.

HR is refusing to show this in Form 16. My question is since relocation transfer cost is exempt:

https://www.incometaxindia.gov.in/Acts/Income-tax%20Act,%201961/2000/102120000000017068.htm

How do I claim this? It won't show up in my Form 16. Any other way to show this expense directly when I file the year end return in July?

Relocation expenses reimbursement or allowance is exempt under 10(14) of Income Tax Act. and it will not form part of salary income. It is ok but new employer has deducted TDS on this. You consider it fully Exempt under 10(14) .

Pravin, thanks for your reply. Yes, employer has deducted TDS on this. And the employer is refusing to include this expense as business expenditure.

Can I still show this expense as expenses under 10(14) during filing my IT return? I am not sure if this will get rejected or if Income tax department will ask for proof submission.

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