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Relocation expenses whether perk

Ranjan (CA) (127 Points)

25 January 2010

Whether expenses paid by employer to employee for relocation of his/her family will be considered as a perquisite

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7 Replies

Amir (Learner) (4016 Points)
Replied 25 January 2010

Dear Ranjan,

As per Rule 2BB read with Sec 10(14), any expenses incuured on tour or travel or TRANSFER shall be exempt..

Exempt will be lower of the following -

1) Amount received as Reallocation expenses

2) Amount Incurred by the employee

Therefore if employer has reimbursed actual expenses than nothing shall be taxable..

However If Employee has not incurred all the expenses then excess amount shall be taxable

Shudhanshu Agrawal (Business) (2570 Points)
Replied 25 January 2010

Originally posted by : Amir
	Dear Ranjan, As per Rule 2BB read with Sec 10(14), any expenses incuured on tour or travel or TRANSFER shall be exempt.. Exempt will be lower of the following - 1) Amount received as Reallocation expenses 2) Amount Incurred by the employee Therefore if employer has reimbursed actual expenses than nothing shall be taxable.. However If Employee has not incurred all the expenses then excess amount shall be taxable

im agree with amir and good reply.

Ranjan (CA) (127 Points)
Replied 25 January 2010

But, if employee is placed in delhi initially & afterwards employee have been given some amount as relocation reimbursement to shift his family from russia to delhi, then, it will not be considered as transfer & therefore these provisions do not apply

Amir (Learner) (4016 Points)
Replied 25 January 2010

Dear Ranjan,

It will still be allowed since the term is wide which includes "TOUR or TRAVEL or TRANSFER"

Sunil (Trader) (2611 Points)
Replied 26 January 2010

It does not matter if the employee himself shifted first and the family comes later. There is no condition laid down that the relocation has to take place all at a time. The entire process of shifting from the date the employee shifts till his last dependent family member shifts is 'relocation' and if they travelled afterwards the entire process is taken as a whole.