Telephone reimbursement

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Querist : Anonymous

Querist : Anonymous (Querist)

09 September 2015 Dear experts
is there any limit for telephone reimbursement in income tax..

plz reply...

Mohan Babu.L

Mohan Babu.L (Expert)
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09 September 2015 Hi,

The reimbursement of telephone expenses including a mobile phone actually incurred by you on behalf of your employer is not taxable in your hands. Telephone facility received by Employee at his residence provided by employer is also not taxable in hand of employee as against Telephone Allowance...

Telephone reimbursement provided to employees is not taxable. This is as per Rule 3(7)(ix) (reproduced below) of the Income Tax Rules.
“The value of any other benefit or amenity, service, right or privilege provided by the employer shall be determined on the basis of cost to the employer under an arm’s length transaction as reduced by the employee’s contribution, if any:”
Provided that nothing contained in this clause shall apply to the expenses on telephones including a mobile phone actually incurred on behalf of the employee by the employer.
Rule 3(7)(ix) states that telephone reimbursement is non-taxable in the hands of the employee. However, the following conditions are to be considered in this regard.
1. Telephone connection includes both land line and mobile connections. While there is no explicit reference to data card connection in Rule 3(7)(ix), some experts opine that data card falls under the mobile phone category since a data card is just a SIM card.
2. There is no explicit reference to the maximum number of connections allowed, in the rule. Organizations typically allow one land line and one mobile connection under Telephone Reimbursement for each employee.
3. The connections have to be in the name of the employee.
4. Employees should submit telephone bills to their organization while seeking telephone reimbursement.
5. Expenses incurred towards both pre-paid and post-paid mobile connections are admissible for tax exemption.

Good Luck...

Querist : Anonymous

Querist : Anonymous (Querist)

09 September 2015 RESPECTED SIR
IF THE EMPLOYEE HAS NOT SUBMIT THE TELEPHONE BILL TO THE EMPLOYER THAN THE FULL TELEPHONE BILL AMOUNT WILL BE TAXABLE OR NOT...

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Mohan Babu.L

Mohan Babu.L (Expert)
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09 September 2015 Hi,
Not taxable. But for your entry & vouching purpose it is better to get the telephone bill from the concern..
Good Luck...

Querist : Anonymous

Querist : Anonymous (Querist)

09 September 2015 but sir,
many chartered accountant has suggest that if no bill is submitted by employee in respect for reimbursement of telephone & medical, than the amount will be taxable...