Curious About Nontaxable Salary Perks in IT? Beyond Petrol, Medical, and Meal Coupons

Nontaxable Components in Large IT Companies

What are the various nontaxable components opted for by large IT companies apart from vehicle/petrol allowance, medical, and Sodexo coupons?

There have been several discussions/threads on non-taxable components of salary in the past. Please use the "Research" option at the top of the page to locate such threads. Alternatively, you can also see the threads on the panel on the right-hand side displaying "Similar Topics".

Warm regards.

Dear Soomanighosh, Following are exempted from tax:

- Child Education Allowance (up to Rs. 100 per child, maximum of 2 children)
- Child Hostel Allowance (up to Rs. 300 per child, maximum of 2 children)
- HRA exemption = minimum of 40% (50% for metros) of Basic+DA or HRA or rent paid - 10% of Basic+DA
- "LTA is exempt to the tune of economy class airfare for the family to any destination in India, by the shortest route. LTA can be claimed twice in a block of 4 calendar years. The current block is from Jan 2010 to Dec 2013."
- Medical reimbursement up to a maximum of Rs. 15,000 (otherwise it will be taxed)
- Club membership (saves tax)
- Conveyance (Rs. 800 per month)

Thanks

I hope the following information is sufficient for you.

Allowances/Reimbursements
Allowances are normally paid irrespective of the employee actually incurring them. These are fully taxable if no bills are provided. However, if the expenses are actually incurred and bills are provided, they are not taxable up to a specified limit under each.

Training Allowance
An amount of up to Rs 14,000 per annum is tax-free if the employee provides relevant bills.

Telephone Allowance
An amount of Rs 12,000 per annum is tax-free if the phone is used for official purposes and bills are submitted.

HRA
House Rent Allowance can be claimed if one lives in rented premises and the rent exceeds 10 percent of the salary. The actual HRA exempted from tax is the least of the following:

- The actual amount of HRA received.
- 40 percent of salary. This increases to

Office Wear Allowance / Uniform Allowance
An amount of up to Rs 18,000 per annum is tax-free if the employee provides relevant bills.

Lunch and Refreshment
An amount of up to Rs 15,000 per annum is tax-free.

Conveyance
For conveyance, up to Rs 800 per month is allowed as a deduction without providing any bills.

Medical Allowance
Bills have to be provided; up to Rs 15,000 per annum is allowed as a deduction. This can be claimed for self, spouse, children, parents, and siblings who are dependent on the assessee.

Leave and Travel Allowance
Two trips in a block of four years are allowed, and only travel within India can be claimed as a deduction. It can be claimed for self, spouse, children, parents, but only if the employee (assessee) is traveling along with them. There is no maximum limit on it.

Education Allowance
An amount of up to Rs 2,400 per annum is tax-free.

Regards,
Shrikant Ghodake

Tax-Free Components

Please find a few components which are tax-free:

- Children Education Allowance: INR 200/- per month
- Medical Allowance: INR 1250/- per month
- Transport Allowance: INR 800/- per month
- Telephone Bills: INR 2000 per month
- Food Coupons: INR 1500 per month
- Helper Allowance: on actual payment
- Leave Travel Allowance: Actual cost spent (limited to economy class airfare or AC first-class fare)
- Academic Research & Professional: To the extent of actual expenses
- Travel Allowance on Deputation: To the extent of actual expenses
- House Rent Allowance non-taxable: Actual Rent Paid or 40% of Salary (Basic + DA) (in Bangalore), whichever is least
- Gift Coupons: INR 5000 per annum

Regards,
Michael Joseph

Thanks for those which we already have. How do companies give almost 30% of their salary as flexible components for reimbursables? Are there any more that you are aware of?

Dear soomanighosh, What is the source of this information regarding the 30% of the flexible component? Where does it state that the 30% is fully tax-exempt? Do you think other companies are foolish enough to burden their employees with taxes? Well, if you have a very low CTC, then it's possible, but for a CTC of, say, more than 15 lakhs p.a., how can 30% be tax-exempt?

Instead of such "conjectures" and hearsay, it would be prudent if you could provide concrete evidence or should have directly asked this question, rather than making the members post their suggestions and then stating that you already have the information or are aware of it.

Warm regards.

Dear All, thank you for your efforts. However, I am sorry to notice that the poster of this thread already has the information and is now looking for something else, as you can see from the latest response. Under the circumstances, I shall stress the need to provide more information and be very specific while posting queries so that others' sincere efforts do not go to waste.

Warm regards.