12 June 2009
An employee of our client has shifted from Bombay to Pune.Apart from meeting his air ticket expense, the company gave him an allowance based on his grade(the company has a policy to give fixed allowances on such occasions based on the grade of employee irrespective of whether any actual expenses are incurred agaist it or not) which is not against any actual expense. Air ticket expenses have been charged to FBT. Whether the allowance given would be taxable in the hands of employee or chargeable to FBT?
12 June 2009
See this allowances are fixed in your case. If employee produce bill for that then bill amount will treated as reimbursement & balance amount will be taxable in the hands of employees.
In case if this allowances was not fixed & will be reimbursed on the basis of actual bill then this will chargeable to FBT & not taxable in the hands of employee.
CAclubindia
