Tax implication on reimbursement of relocation charges

Any Tax Implication on Employer and/or Employee on the Reimbursement of relocation charges agianst the bills at the time of joining of the employee

Pl advice

 

Replies (2)

Dear Sagar,

                           As per Law, Amount which is received more than expenditure will be taxable in the hand of employee. please write me full detail in this regard for more clarification my email id is sachinagarwalcallb @ gmail.com

From direct tax perspective, under Section 17(1) of Income Tax Act 1961, any relocation expenses reimbursement is exempted in hands of the employee( and therefore FBT also will not apply on this being exempted perspective).

From Cenvat credit perspective, if company wants to avail Cenvat credit of service tax on the relocation expenses, it should take care that bill should satisfy requirements of the Cenvat credit Rules 2004/

 

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