04 December 2010
OUR COMPANY PAID TO EMPLOYEES VEHCILE EXPENSES FOR UP & DOWN IN OFFICE RS. 5000/- IN A MONTH. ( AGAINST SUPPORTING BILL ) IS IT TAXABLE FOR EMPLOYEE ?/ AND EMPLOYEER ?
05 December 2010
If the expenditure is incurred by the company against genuine bills and it has been prescribed in the service agreement with the employee, Expenditure reimbursed is deemed to be the part of the remuneration to employee and as such allowable to the company as an expenditure. However, the said expenses are related with commuting between the place of residence and place of duty, the exemption of800/- pm only is available to the employee as specified in Rule 2BB. As such amount exceeding800/ pm is taxable in the hands of the employee.
07 December 2010
Agreed. An Employee can claim exemption u/s 10(14) to the extent of Rs. 800/-p.m. as conveyance/transport allowance. Amt. in excess thereof is taxable in the hands of employee.
However, the employer can claim full amt. as expenditure.
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