Dinesh Divekar
Business Mentor, Consultant And Trainer
Asso.prof.(commerce & Management) Pg
Sr. Hr Manager
Manager- Hr & Admin
Office Administration
+2 Others

Thread Started by #Anonymous

My job involves a lot of traveling The expenses I need to pay by myself and after submission of bills my company reimburses back to me which come to my Salary savings bank accounts.Need to understand is all the credits to my Savings bank account taxable or will you advise me to open reimbursement account.
21st July 2014 From India, Pune
Dear friend,
Let me explain you in simple language.
"Income Tax" is always on income of the employee or earning of the employee. Now in your case, you had spent some money to book tickets, hire cab etc. This is expenditure. Company just reimburses the amount spent on their behalf. How can there be tax on this amount?
To avoid the confusion, I recommend you providing Form-16 to your CA. Secondly, provide him the bank statement. In the bank statement, encircle the non-salary credits. This will help your CA to understand what is income and what was reimbursement.
Dinesh Divekar
21st July 2014 From India, Bangalore
I fully endorse Dinesh. Also as a precaution, its always better to have a separate reimbursement account or still better to use Corporate Credit cards for such purposes.
21st July 2014 From India, Mumbai
Reimbursements are not taxable. Some employers facilitate opening a bank account for reimbursements alone. When I was in L&T, they facilitated the reimbursement account with ICICI. Pon
21st July 2014 From India, Lucknow
As far as you can produce the supporting bill stating the expenses made for the company, there will be no TDS otherwise it will be treated as an income and tax will be deducted
21st July 2014 From India, Mumbai
Let me narrate my scenario which is quite similar. I\'m a retainer / consultant with a reputed company and submit monthly consultancy fees bill and get paid for the same each month. In the same monthly bill I also put claim amounts for some reimbursements like mobile, local conveyance spent on company business. When I get paid they deduct 10% TDS on the total amount (including fees and reimbursements) and also later provide me TDS certificate (Form 16A) for the deductions. I had inquired with them but their finance says it\'s as per law. In their wordings \"As per IT Act 1961 they have deducted 10% Flat on all my Claims & Fees\".
Let me know if this is correct.
23rd July 2014 From Hong Kong
The opinion of Mr. Isarahmed is correct to the extent that the company deducts the income tax @10% on all his reimbursement as he falls under professional fee category. He is not an employee of the company. Actually the reimbursements on company business work such as transport, tour and travel etc. are not taxable and are not a part of the CTC. Mr. Isarahmed would have to claim income tax refund by showing these reimbursements as his expenses in his income tax return. But if you are an employee of the company and you are sent on tour for company business, then in that case all the tour and travel expenses are not a part of your CTC and do not attract the income tax. It does not matter whether these are deposited along with your salary or as a separate one and in your salary account or other account in the bank.
23rd July 2014 From India, New Delhi
Your case has been treated as payments to "Consultant" deducting TDS @ 10% u/s 194 J as a precaution to avoid penalty & interest for failure of deducting TDS & remitting to govt. However you can claim deduction from Business/Profession income for expenses incurred towards travel etc. as these are supported by bills.
23rd July 2014 From India, Bangalore
Dear Mr Isar Ahmad,
Since you are not an employee and external consultant what your client is doing is correct i.e. deduction of tax for all the payable. Let me suggest one option to escape from TDS on supplementary claims.
I recommend you raising the invoice for your consultancy charges. These charges are taxable u/s 194J of IT Act 1961.
For all your supporting bills like transportation or mobile bill, claim it separately and take the cash from the accounts. Do not consolidate all the bills and raise reimbursement invoice also as again this invoice will be taxable. The better solution is to raise voucher for each claim separately. Just attach summary of the claim on the white paper. Before doing this, check with the accounts whether they are ready to accept bills for the local claim. If not, then you will have to continue with the existing procedure.
23rd July 2014 From India, Bangalore
In my Job I do extra work like conducting EXAMS of various dept like POST, BANKS etc. I will be paid as Chief examiner, Chief Supdt etc which i may get around Rs. 3 to 6000 quaterly/six months once. Since Amt crosses Rs.500/- it will give CROSSED CHEQUE. I have deposit in my Bank Account. Is this INCOME TAXABLE to me ??
Kind reply solicited.
30th July 2014 From India, Hubli
As Mr. Dinesh advised please provide 2 different bills for your fees and reimbursement separately, They can deduct 10% only on fees and not on any other charges if it is specifically mentioned.
With regards to TDS already deducted for which you have received Form 16A, please consult your CA with your original bills of reimbursement, and they will guide you to claim the refund.
4th August 2014 From India, Ahmadabad
Reply (Add What You Know) Start New Discussion

Cite.Co - is a repository of information created by your industry peers and experienced seniors. Register Here and help by adding your inputs to this topic/query page.
Prime Sponsor: TALENTEDGE - Certification Courses for career growth from top institutes like IIM / XLRI direct to device (online digital learning)

About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service

All rights reserved @ 2019 Cite.Co™