Tax Treatment Of Allowances - CiteHR
Khyat
Student
Gaggan_sahni
Hr Manager
Arunprasad23
Employed
+1 Other

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hi,
i ve the following doubts w.r.t to CTC
1. Telephone reimbursement -
- If this component is a part of the CTC, can an employee get tax exemption for the entire amt as per the bill?
- assuming the employer pays a percentage, say 75% of the bill, can the employee still tax exemptiion for the 100% amt?
2. Dress/Uniform Allowance/reimbursement:
-can this applicable to all employees?
-is there any limit for the maximum amt that can be exempted on production of bills, or can v avail the exemption for any amt?
3. Car Allowance/reimbursement:
- can the employee claim tax exemption for the reimbursement of fuel,maintainence and driver's salary, even if the car is not in his/her name but is in the name of his/her family member?
- what is the limit for this exemption?
request al of u to lemme know this fast coz i need to design the CTC structure for a company based on this.
Regards,
Deepthi

Hi Deepthi,
The term REIMBURSEMENT itself means you need to substantiate with evidences i.e. the bills for the amount spent. If the amount is less than the entitlement you will have to pay tax on the balance.
With respect to Dress/uniform Allowance, this can be applicable to all the employees. Yes there is an upper limit on the amount.
Car allowance can be extended from a specific band or level in the organisation. It is mandatory that the car should be registered on the employees name. Also please keep in mind that no other allowance in the salary structure should exceed Basic. Limit on Car Allowance can be decided by the Management or person designing the comp & ben structure. It can be a fixed amount for all levels above a Manager.

can any 1 tell me bout the tax treatment of advances / loans given by the co to its ee for housing purpose...........
DEAR DEEPTI,
PLS NOTE ALL THESE HEADS ARE NOW COVERED BY THE FBT...FRINGE BENEFIT TAXS...PLS CHECK WITH UR CO. CHARTERED ACCOUNTANTS FOR THE RATE OR FINANCE DEPT......HENCE THEY ARE ALL TAXABLE TO THE COMPANY AND MOST CO. PASS THESE OVERHEADS TO THE EMPLOYEES....SO PLS CHECK....

Dear Mr Arun Prasad,
I am working in a proprietorship firm, My CTC is around 8 Lac. We have Flexi salary structure. Basic is 33K and HRA is 13K medical reimbursement 1.25K for the rest Can u pls suggest what component should I add so that my tax outgo will come down. Also pls inform u/s 10(14) of income tax, what is the limit of Uniform Maintenance Allowance and whether any proof is required to get the income tax exemption? Can I take this... even if uniform is not mandatory in office?
Arun

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