TAXABLITIY OF PERKS

TDS / TCS 562 views 3 replies

CA Pawan Lakhotia

Infosys Limited

202 Points Posted on 09 January 2010

Dear Freinds,
Its VERY urgent please reply soon ..waiting

In a company Salary Part-B is given under the Head as Car Fuel , Car Driver, Car Maintenance &Insurance, Society charges, Residence Telephone, Mobile expenses as Fixed component and also on Actual bills, employee to employee it differs.Earlier company gives FBT on it. My Question is that:-

1.As it is a Fixed part in salary should it be treated as allowance or perquisites?

2.If it is allowance then these are fully taxable?

3.Can it be treated as perquisites as company takes the Bill against each expenses as reimbursement tough it is a part of Salary is it applicable as per IT Act?

4. What is taxability of these components now after NOTIFICATION as on18 December?

PLease................................promptly and clearly answer my Questions individually

Thanks in Advance

Replies (3)

Amir

Learner

4016 Points Posted on 09 January 2010

Dear Pawan,

1) Reimbusements are made against some bills,etc which may vary from month 2 monthbut that doen't mean that reimbursements cannot be fixed, reimbusements can be fixed if following conditions are satisfied -

a) There is celing on maximum amount &

b) Every month actual expense exceeds the ceiling..

Criteria is to whether payments are made against the proof of expenditure or not, if yes then it will be termed as Perks otherwise allowance..

2) Yes Allowance of the nature u have mentioned are fully taxable

3) Yes u can treat as perks by collecting actual bills from the employees..

4) Follow this link for taxability of perks

accretiveglobal.com/.../Perquisite%20Valuation%20for%20Employees%20_December%202009_.pdf -