seema (Associate Accounts Consultant) (122 Points)
06 March 2009Hi,
In Our firm we providing 1800/- Per month as Communication allowance. till now we giving the tax benefit upto bills ptovided for actual expenditure up to 1800/- but sum employees have trouble with as in in a month they used it as amounting Rs. 500 and 3000 for any other month they claim exemption for 3500/- but we provide only for 2300 (500+1800/-). can anybody tell me which one is correct method to calculate the exemption????
R.Suresh
(Sr. Executive)
(394 Points)
Replied 06 March 2009
You can give Rs.3500/- also becuase they used for only what purpose u given that is the matter u dont' care with month.
For Example: Employee going to attained the some communication course it will going for 3 months or more but they paid 100% full payment like Rs.3500/- in this case u can take for 2 months (i.e) 1800*2-100.becuase they utilised fully for the above said purpose only.
Sorabh Gupta
(Manager ( Taxation ))
(877 Points)
Replied 06 March 2009
Hi Seema
In case of reimbursement of bill , maximum limit Or Bill whichever is less is used for the payment yo employee.
As you told the method i.e. 500 + 1800 for two month os coorect way of accounting.
seema
(Associate Accounts Consultant)
(122 Points)
Replied 06 March 2009
Thanks Mr. Sorabh,
But can you tell if there is any ruling for that so i could convince these people.
Sorabh Gupta
(Manager ( Taxation ))
(877 Points)
Replied 07 March 2009
Seema
Look , for accouting there is no ruling its only a subject matter of rule taht how a concern or comapny apply the rule .
It all depends on rule i.e. " Maximum limit of Rs 1800 Per month " OR " Rs. 21600 Yearly"
There is lot of difference on above specified rule. So lets discuss with your senior about ruling & as you required there is no act & ruling who defines about the way of accounting.
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