Tax exemption

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 August 2014 I have query pertaining to Telephone Exemption. Actually we have about 35 employees in our company and who are highly paid.Currently in the salary structure we do not have Telephone allowance,however we realize to add this component,so that the majority can save tax. Kindly advise if it's useful to add this component now as we have already in Aug'14 now.
Also advise if the bills has to be on Employees' name only?
Also clarify whether this exemption is for official bills or only on personal bills?
Thanks for your advise in advance.

Best Regards,
Nivedita Agarwal
HR-Generalist

Ashwin Sharma

Ashwin Sharma (Expert)
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22 August 2014 Telephone allowance can be included in salary structure. Exemption is given on submission of actual bills (in employee's name).

The exemption is given on assumption that usage is for official purpose. Practically it is not possible to check.

However generally exemption is given.

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Querist : Anonymous

Querist : Anonymous (Querist)

22 August 2014 Ok..Thanks a lot Ashwin.

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Ashwin Sharma

Ashwin Sharma (Expert)
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Querist : Anonymous

Querist : Anonymous (Querist)

22 August 2014 Hi,
Thanks for your response to my earlier query.
I have question about including the Internet Bills also in this exemption. So can we include both Telephone and Internet bill.
Please clarify.
Regards,
Nivedita

Ashwin Sharma

Ashwin Sharma (Expert)
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22 August 2014 Telephone and mobile allowance is mentioned in income tax act as being exempt. Internet allowance is not specifically mentioned.

However internet expenses can be reimbursed to employees out of payroll. Reimburse it on submission of actual bills.

Another option is, provide data cards to employees and payment is made directly by the company

Querist : Anonymous

Querist : Anonymous (Querist)

25 August 2014 Hi Ashwin,
Could you please advise if its legal to introduce this ? as the exemption is given to the employees personal bills here,but not the bills for official purpose.
Pls advise
Regards,
Nivedita

Ashwin Sharma

Ashwin Sharma (Expert)
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25 August 2014 It is practically not possible to keep a check on if its used for personal or official purpose.

Chauffeur driven cars, petrol reimbursement is provided to top level employees and whole amount is exempt under presumption that its being used for official purpose.

As you mentioned, that these employees are of top level and they carry responsibility, much wider in scope. we can assume that their out of office hours is also used for offical purpose to some extent.

so in my opinion we can go ahead with the exemption

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Querist : Anonymous

Querist : Anonymous (Querist)

25 August 2014 okay..Thanks for your advise..