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Please Advise on how to save tax on allowances

sugata (Manager) (40 Points)

07 June 2009

Dear Friends

How can I save tax on the following alowances which are paid to me by my employer per month.

CAR ALLOWANCE 3000, DRIVER SALARY 5000, TELEPHONE ALLOW 2000

TRANSPORT SYSTEM 7000 , UNIFORM ALLOWAN 5000.

Hope seniors here will share their knowledge.

Regards

Sugata

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4 Replies

sugata (Manager) (40 Points)
Replied 07 June 2009

Dear All

Forgot to add that I do have a car (Car Loan EMI 6300) and a driver.

Thanks

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Ankit Madhogarhia (Pursuing Final) (531 Points)
Replied 08 June 2009

In my view u dnt hav to pay any tax on the following allowances because the employer pays FBT tax.so no need to wory.

sugata (Manager) (40 Points)
Replied 08 June 2009

Dear Ankit

My employer requires that employees submit bills for Medical,Telephone and Uniform(laundry expenses).

How do I save tax on car and driver related allowances ?

Thanks

Sugata

RAMANJU (here to updating the knowledge) (485 Points)
Replied 08 June 2009

In My view, 1. there is no term called car allowance under income tax act, so it can be taken as special allowance and taxable in the hands of employee. 2. Driver salary is covered under FBT provision and accordingly employer is liable for FBT. 3. Telephone allowance is exempt. 4.Transport allowance is exempt up to Rs. 600 Per Month. 5. Uniform allowane is wholly exempt.