Understanding Tax Rules on Employee Expense Reimbursements: What Are the Limits and Exemptions?

Hi all,

I want to know about the taxability on reimbursement of expenses in the hands of the employee and the maximum cap/limit of the same. For example, if the company reimburses the telephone expenses, petrol expenses, books, driver's salary, car maintenance, etc., then:

1. What is the maximum cap/limit for claiming such expenditure that can be fixed by the company for such expenses?
2. Under which section of the Income Tax Act can the deduction be claimed by the employee, or under which section is it not taxable?
3. If a breakup can be given, please provide like:
- on Telephone
- on Petrol
- on Car Maintenance
- on Driver's Salary
- on medical expenses
- on Telephone expenses

Please reply soon; it's really very urgent.

How is the company not considering the following expenses for tax calculation? All are paid in the payslip but not reflected in Form 16:
- Telephone expenses
- Petrol
- Car maintenance
- Driver's salary

Thanks in advance.