25 November 2009
hi we are giving the following fixed monthly allowances to our employees as part of their salary: 1.telephone allowance 2.internet allowance 3.conveyance allowance I just wanted to know whether a certificate from our company that these allowances are used by the employees for official purposes only, will be enough to treat these allowances as exempt in the hands of employees.
If any other documents/declarations are required, pl let me know so that any taxation complication may not arise .
26 November 2009
Only conveyance allowance upto limit of Rs. 800 Per month would be tax free and other two will be taxable.
Instead of accepting allowance, one should have to claim internet and telephone expenses on actual basis. Then it would be reimbursement of expenses which is not taxable.
CAclubindia
