Tax Free Allowance

Hi,

In Our firm we providing 1800/- Per month as Communication allowance. till now we giving the tax benefit upto bills ptovided for actual expenditure up to 1800/- but sum employees have trouble with as in in a month they used it as amounting  Rs. 500 and 3000 for any other month they claim exemption for 3500/- but we provide only for 2300 (500+1800/-). can anybody tell me which one is correct method to calculate the exemption????

Replies (4)

You can give Rs.3500/- also becuase they used for only what purpose u given that is the matter u dont' care with month.

For Example: Employee going to attained the some communication course it will going for 3 months or more but they paid 100% full payment like Rs.3500/- in this case u can take for 2 months (i.e) 1800*2-100.becuase they utilised fully for the above said purpose only.

 

Hi Seema

In case of reimbursement of bill , maximum limit Or Bill whichever is less is used for the payment yo employee.

As you told the method i.e. 500 + 1800 for two month os coorect way of accounting.

Thanks Mr. Sorabh,

 

But can you tell if there is any ruling for that so i could convince these people.

Seema

Look , for accouting there is no ruling its only a subject matter of rule taht how a concern or comapny apply the rule .

It all depends on rule i.e. " Maximum limit of Rs 1800 Per month " OR " Rs. 21600 Yearly"

There is lot of difference on above specified rule. So lets discuss with your senior about ruling & as you required there is no act & ruling who defines about the way of accounting.

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