Roshini.arya
Head Legal
Shah01ankita
Talent Acquisition / Consultant - Catalis

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Respected Experts
Please educate me regarding the various limits available for tax relief for the following items for a salaried employee of an organisation
Also how can an employee avail these deductions while calculating his income tax amount to be filed.(Documents that need to be submitted)
Please let me know the non taxable limit for
  • Child Education Allowance
  • Medical Reimbursement receipts submitted
  • Transport/Conv. Allowance
  • LTA receipt submitted
  • Food Coupons
  • Periodical Journals
  • Uniform/Dress Allowance
  • Telephone Reimbursement receipts submitted
  • Prof. Development receipts submitted
  • Car Expenses Reimbursement receipts submitted
  • Driver Salary receipts submitted Internet expense receipts submitted
  • Is Performance Incentive/Bonus taxed with Gross salary(clubbed) or separately.
Much obliged as always & awaiting your valuable responses.
Regards
Roshini Arya

From India, Jalandhar
Hi Roshni,

In regards to your query kindly find the response below:

It is tax exempted upto Rs. 100 pm per child. Can be availed for max of 2 children.

If an employee has a child at hostel, we can give Child Hostel Allowance. Tax Exemption of 300 Rs. per month per child can be availed.

I think school /hostel fee receipt is to be submitted as proof.

Medical bills - Bills from hospital for any admissions, Bills from doctors for any relevant examination, Bills from chemist for proper medications etc are to be submitted.

It is either 1250 per month or 15000 per annum.

In the absence of the proper documents, the amount is fully taxable.

Whatever amount your company gives as medical allowance, the amount would be tax exempted to the extent of the amount in the bill or 1250 pm (15000 pa) whichever is lower.

Conveyance allowance is given to employees so that they can be reimbursed on the expenses they incur to come to office from their home.

An amount of Rs. 800 per month (i.e. 9600 per annum) is tax exempted and no documents are required for this exemption.

For physically challenged persons, this allowance is tax exempted upto 1600 Rs per month (19200 per annum)

However transport allowance is different and is given to employees who are goping to other city for some office related work. In such case we are to reimburse the expense incurred by the employees on the tickets and hotel reservation on actual basis. Usually this is not a part of salary and is paid as it incurs and is reimbursed. Relevant tickets and other bills are to be provided to claim reimbursement.

LTA is leave travel allowance and is availed twice in a bracket of 4 years. Current bracket is of 2011-14 (Kindly Correct me if i am wrong)

Usually availed in 2nd and 4th year when the employee goes on a vacation with family. The LTA for employees is fixed based on the designation.

Please note that -

LTA will not be paid every year but would be paid only once in two years.

In order to claim LTA, employee will have to submit the tickets, and other bills.

Reimbursement policy is available on net, kindly Google it.

If incase the person has not gone out on vacation and has not claimed it and yet the company has paid the LTA amount to the employee, full amount will be taxed.

If the employee claims LTA based on bills, only the incurred amount would be reimbursed (hence exempted to that extent) or would be reimbursed on the above limit said by the policies.

Now there is a difference between food allowance and food coupons.

Food allowances are tax exempted to one meal and two teas i.e. lumpsum 50 Rs a day i.e around 1300 Rs a month (assuming 26 working days) payable only for working days.

Food coupons or meal vouchers however are fully tax exempted.

This is a non-taxable allowance if you are required to wear a uniform to work and receive an allowance to cover its cost, or if you are provided with a uniform. This exemption only applies where the uniform is clearly distinguishable from ordinary clothes.

Required bills are to be collected.

Usually the companies declare an upper limit depending on the designation. Mobile or telephone bills are evident enough.

What is being practiced in many firms is that employer asks for detailed bills and employees are asked to identify personal calls and such amount is deducted from reimbursement.

Many employers encourage people getting training and updating their knowledge base. So if the training is done in the relevant field that will enhance their performance, you can get it reimbursed to the extent of the bill.

I believe this will be upto company's policy. Reimbursements are not taxed in hands of employees.

I don't think one needs to submit a reciept for incentives. What my company does is issues a cheque for incentives so that relevant entry is made in bank.

If cash is issued, we take signature of the receiving employee on a voucher.

From India, Mumbai
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