Curious About Tax on Reimbursements? What Happens If You Don't Submit Bills?

Can somebody tell me what percentage of tax is levied on the following if the employees don't submit the bills at the end of the financial year:

- LTA
- Medical Reimbursement
- Conveyance and phone reimbursements

With Regards,
Poonam

Hi Poonam,

There is no fixed percentage which is deducted for non-submission of the above-mentioned bills. The tax will be deducted based on the tax slab in which they fall. For example, if someone's taxable income is between 1L to 1.5L, then only 10% of tax will be deducted from their salary. However, if someone's taxable income is more than Rs. 2.5L, then 30% of tax will be deducted from the amount paid.

I hope this clarifies the tax deduction process. If you have any further questions, feel free to revert back.

Smiles,
Navroz
+91 981 981 4336

Hi Navroj,

Thanks for the response. I believe this tax percentage applies to the payslip salary. In my organization, salaries are split into two parts: the payslip salary consisting of basic pay, HRA, TA, and other allowances, and the other half is provided as reimbursement, which includes medical and LTA treated differently. I think the tax percentage on medical reimbursement is a flat 25%, but I'm not entirely certain. Do you have any insights on this?

Regards,
Poonam

I believe there is no such rule which you have mentioned - taxable amount is paid as per the tax bracket the employee comes into.

Cheers,
Navroz

Hi, I agree with Navroz. The tax slab is as follows:

0 - 1,10,000 - 0%
1,10,000 - 1,50,000 - 10%
1,50,000 - 2,50,000 - 20%
2,50,000 - above - 30%

This amount is after all the deductions like conveyance, HRA, Medical allowance, 80C savings, Medical insurance, etc. If for Medical, LTA - bills are not produced, they come under taxation directly. LTA is calculated once every 2 years, so you can overlook it.

Cheers,
Suneel

Poonam,

It is possible that your company is recovering the FBT from the employees. Please confirm this with the accounts department of your company.

Thank you.

Sunil,
The correct income tax slab for FY 2008-09 as below:
Male<65 years of age

Upto Rs 1,50,000/- 0%
150000-300000/- 10%
300000-500000/- 20%
Above 500001 30%

Female<65 years of age



Upto Rs. 1,80,000/- 0%
1,80,001/- to Rs. 3,00,000/- 10%
3,00,001/- to Rs. 5,00,000/- 20%
Above 500001 30%

Senior citizen

Upto RS 2,25,000 0%
Rs. 2,25,001/- to Rs. 3,00,000/- 10%
Rs. 3,00,001/- to Rs. 5,00,000/- 20%
Above 500001 30%

· Secondary and higher Education Cess of 3% over the Tax liability plus the surcharge (if any) will be levied
If income is above 1000000 an Additional surcharge of 10% over the taxliability will be levied