Can reimbursement of expenses be shown as part of salary

This query is : Resolved

Mittal Anuj (Querist)
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23 September 2007 Can we show reimbursements like Conveyance expense, food expense etc as aprt of salary break up in offer letter and pay slip ??? Since normally in industry it is shown seperately as Flexible pay or under Entitlements head. And monthly the amount is shown on seperate reimbursement slip insetad of on pay slip. Please clarify the issue. Thanks in advance for your time.

Ravikumar.G

Ravikumar.G (Expert)
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23 September 2007 If it is Form part of salary it should be shown only under salary. Otherwise it will attract FBT Net.

CA Prasanna Krishnan V

CA Prasanna Krishnan V (Expert)
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23 September 2007 Dear Sir

It appears that you interchange the words Allowances and Expense Reimbursement. If that is the case the same is not correct.

When the employee is getting reimbursement of expenses spent during office hours, it is very much employer's expense only (FBT attracted).

You can show in salary related records only the Salary and all other allowances. Allowances does not require any evidence from the receiver to prove the claim since it is pre agreed one with employer on ad hoc basis.

Please maintain the difference accordingly.

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Mittal Anuj

Mittal Anuj (Querist)
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25 September 2007 Lets take an example to make it more clear. Suppose an employee has Rs 50 k as his CTC. Now out of this Rs 780 being dedcuted on account of Employers contribution towards PF. hence his gross salary is Rs 49220/-. Now when every month when company pay to this employee they deposit Rs 49220 reduced by employee part of PF and TDS. let say Rs 35000/- being deposited. Now if company actually paid Rs 40000 due to some reimbursements being paid out with salary then can he show these reimbursement on salary slip. Since, otheriwse the amount credited in bank will not reconcile with pay slip without reimbursement amount. Also clarify whether the company can show Employer part of PF on payslip so as to reconcile the total amount to the CTC offered to employee. Since, under gross salary figure we cannot show this amount. But can we show this part after gross salary and before total of CTC....

CMA Gul S

CMA Gul S (Expert)
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25 September 2007 Hi Mittal,

Reimbursement is made for some Expenses that the employee spends on behalf of the official work.

Or else there is Medical Reimbursment which is Exempt till limit of 15k on submission of Bills. If employee do not submit bills and if the employer pays the same that is a part of income.

What your are talking of Extra 5k could be a Allowance or medical Reimbursement (wo bils)