Hi Seniors,
Is Medical Allowance & Uniform Allowance included in reimbursement and taxable for the employer under the Fringe Benefit Tax (FBT)? Please guide me on the salary components under which an employee can receive exemptions.
Currently, we offer HRA, Uniform Allowance, Conveyance, LTA, and Special Allowances in our structure. However, I am considering revising the structure as employees are facing a heavy tax burden. Please help.
Regards,
Shikha Jain
From India, Bangalore
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4Is Medical Allowance & Uniform Allowance included in reimbursement and taxable for the employer under the Fringe Benefit Tax (FBT)? Please guide me on the salary components under which an employee can receive exemptions.
Currently, we offer HRA, Uniform Allowance, Conveyance, LTA, and Special Allowances in our structure. However, I am considering revising the structure as employees are facing a heavy tax burden. Please help.
Regards,
Shikha Jain
From India, Bangalore
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Hi Shikha,
In my view, Medical Allowance and Uniform Allowance reimbursement should not come under FBT because it's a part of salary, not a benefit that the company is providing apart from salary to its employees.
As far as your salary structure is concerned, I believe you have chosen the right salary components in your present structure. If any kind of incentive could be included, this will reduce the tax burden.
Regards,
Dhanesh
From India, Gurgaon
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In my view, Medical Allowance and Uniform Allowance reimbursement should not come under FBT because it's a part of salary, not a benefit that the company is providing apart from salary to its employees.
As far as your salary structure is concerned, I believe you have chosen the right salary components in your present structure. If any kind of incentive could be included, this will reduce the tax burden.
Regards,
Dhanesh
From India, Gurgaon
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Hi Dhanesh,
Thanks for your immediate response. I was going through the definition of FBT on the net as per the below-given link: [What is fringe benefit tax?](http://www.rediff.com/money/2005/mar/22spec.htm) I found that any kind of fixed component paid under salary is taxable. Also, as per my knowledge, incentives are also taxable. If you have any links related to this, please forward them.
Regards,
Shikha Jain
From India, Bangalore
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Thanks for your immediate response. I was going through the definition of FBT on the net as per the below-given link: [What is fringe benefit tax?](http://www.rediff.com/money/2005/mar/22spec.htm) I found that any kind of fixed component paid under salary is taxable. Also, as per my knowledge, incentives are also taxable. If you have any links related to this, please forward them.
Regards,
Shikha Jain
From India, Bangalore
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Hello Sikha, If the medical allowance headed as "Medical reimbursemt" so that should not be taxable if any employee get it as a "Medical Allowance" so that is taxable.
From India, Kashipur
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From India, Kashipur
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Hi shikha, medical allowance as part of ctc, is non-taxable to employee upto 15000/annum on submissin of bills. If emp not submit bills, can be paid after tax.
From India, Ambala
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From India, Ambala
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Hi Shikha,
Medical reimbursement is non-taxable subject to submission of bills (max Rs. 15,000/- per annum). This can be a part of CTC. You can pay in advance with monthly pay (but will have to mention in the offer/appointment letter). Bills need to be submitted by the end of the year; non-submission of bills will attract a deduction of income tax.
Regards,
Pooja
From India, Panvel
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Medical reimbursement is non-taxable subject to submission of bills (max Rs. 15,000/- per annum). This can be a part of CTC. You can pay in advance with monthly pay (but will have to mention in the offer/appointment letter). Bills need to be submitted by the end of the year; non-submission of bills will attract a deduction of income tax.
Regards,
Pooja
From India, Panvel
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Hi all,
As far as I know, FBT is basically for only some particular grades of employees. I mean it's the grade of employees whose CTC is more than a limit which is fixed by the company according to its policies. I think it includes things like car charges or taxi charges, driver salary, etc. Please do add if you have any inputs...
Thanks in advance 😊
Regards,
Yousuf
From India, Bangalore
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As far as I know, FBT is basically for only some particular grades of employees. I mean it's the grade of employees whose CTC is more than a limit which is fixed by the company according to its policies. I think it includes things like car charges or taxi charges, driver salary, etc. Please do add if you have any inputs...
Thanks in advance 😊
Regards,
Yousuf
From India, Bangalore
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Hi,
FBT is charged on employers. If a car, petrol amount, driver salary, and car maintenance are part of the cost to company (CTC) and the car is used to perform official duties, while petrol, driver salary, and car maintenance bills are reimbursed by the employer, FBT will be charged on the employer. During a recession, the employer can recover FBT from employees.
From India, Ambala
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FBT is charged on employers. If a car, petrol amount, driver salary, and car maintenance are part of the cost to company (CTC) and the car is used to perform official duties, while petrol, driver salary, and car maintenance bills are reimbursed by the employer, FBT will be charged on the employer. During a recession, the employer can recover FBT from employees.
From India, Ambala
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Medical bill reimbursement is non taxabale subject to submission of bill max Rs.15000 /-pa. but when it come in salary sheet its also taxable. Thanks .subroto
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Hi Payal,
Any amount paid to employees on a monthly basis is treated as an allowance and is taxable. Even if the employee submits the bills for medical allowance at the end of the year, it is treated as taxable. The simple reason is that reimbursement is an amount which the employee spent and then claimed, whereas in this case, a fixed amount is paid every month to employees.
"Hi Shikha,
Medical reimbursement is non-taxable subject to the submission of bills (maximum Rs. 15,000/- per annum). This can be a part of CTC. You can pay in advance with monthly pay (but will have to mention in the offer/appointment letter). Bills need to be submitted by the end of the year; non-submission of bills will attract a deduction of income tax.
Regards,
Pooja"
From India, Mumbai
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Any amount paid to employees on a monthly basis is treated as an allowance and is taxable. Even if the employee submits the bills for medical allowance at the end of the year, it is treated as taxable. The simple reason is that reimbursement is an amount which the employee spent and then claimed, whereas in this case, a fixed amount is paid every month to employees.
"Hi Shikha,
Medical reimbursement is non-taxable subject to the submission of bills (maximum Rs. 15,000/- per annum). This can be a part of CTC. You can pay in advance with monthly pay (but will have to mention in the offer/appointment letter). Bills need to be submitted by the end of the year; non-submission of bills will attract a deduction of income tax.
Regards,
Pooja"
From India, Mumbai
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Hi All,
Thanks for your valuable input, but it's still not clear as some are replying in the positive and some in the negative. If someone has any authority or a copy of the act that states whether it is applicable or not, please forward.
Shikha
From India, Bangalore
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Thanks for your valuable input, but it's still not clear as some are replying in the positive and some in the negative. If someone has any authority or a copy of the act that states whether it is applicable or not, please forward.
Shikha
From India, Bangalore
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Latest Hand book on FBT Sep.2008.pdf