Save Rs 499. Go Ad-Free with CAclubindia Pro for 2 Full Years. Subscribe Now!

Relocation expenses reimbursement to new employee

TDS / TCS 1029 views 1 replies

Deepak Asopa

22 Points Posted on 03 July 2018

Dear All

I have just got a new job and relocated myself to Banglore. The company promised to reimburse Relocation Expenses of Movers & Packers and travel charges for me and my spouse. However upon producing all actual bills for reimbursement the company deducted TDS on amount paid to me as relocation expenses. I showed them provisions of Sec 10(14) read with rule 2BB of Income Tax Act regarded exemption of thisreimbursement. However the company has said that this Clause only applies to relocation of existing employees. For new employees reimbursement of relocation expenses is taxable. I am having doubts on this. Please help to clarify and if you can give any reference to any case laws than that will be highly appreciated.

Thanks

Replies (1)

Nanda Kumar M

CA Practice

47 Points Posted on 19 July 2019

Even if the company insists for taxing the reimbursement , I feel the employee could claim the exemption considering the fact that the income tax dept will treat the salary received from different employers under the head "income from salary' and since relocation is a necessary event to earn the income ... He can make the claim for benefit while filing the return