Reimbursement Components to Save Tax

Hi,
We are planning to introduce new Salary Structure in our Company.

Please share the your inputs on Reimbursement Components where High salaried employees can save TAX.

Thanks in Advance
Ramesh

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Employee Reimbursements are audited and the Income Tax department puts the responsibility on the employee to ensure that bills are proper and authentic. It is recommended that all employees strictly follow the rules related to reimbursements or else even if one case comes up for checking, all employees can be subjected to scrutiny and if discrepancy found, prosecution from IT department.

· Please note the below:

a. Bills to be rejected if there is any over-writing on the same.

b. Entertainment bills should specify the name of client met.

c. Claimed Bills should be of Working Days only.

d. If you are claiming Driver Salary, Driver’s salary receipt should have revenue stamp & signature of the driver on the same. Also need to submit the Log book for the Car Usage.

e. You need to submit the attached declaration for using Car for Official purpose.

f. Claims to be submitted on Monthly Basis only. No accumulated Claims will be processed.

Kindly find below the types of bills and enclosed formats that can be submitted against different heads to claim the reimbursements.

Head Kind of Bills to be submitted
Car Petrol Reimbursement · Original Petrol/Diesel Bills
· Vehicle Log book to be submitted
Driver Reimbursement · Driver Receipt with Revenue stamp
· Vehicle Log book to be submitted
Books & Periodicals · Original Bills related to purchase of Books, Magazines, Newspapers, etc. via Online or Vendor purchase
Conveyance Reimbursement · Original Bill from Authorised Taxi Service Provider
· As Auto’s & Taxi’s cannot provide bills, so can we have the excel as attached for claiming reimbursements, approved by Department Head
Entertainment Allowance · Food Bills of Working Days only, Client name duly mentioned behind the bill
· Pickup & Take-away bills will not be allowed
Mobile Reimbursement · Post-paid Mobile Bill
· Prepaid Recharge Bill/Voucher with Mobile number mentioned on the same
Car on Lease · Yearly Agreement provided Car to be in the name of Spouse, Son, Father, Mother & Unmarried Daughter along with RC Copy, Insurance Copy & PUC Copy.
· Monthly Invoice
· Car Log book to be submitted
Personal Car · Car Log book to be submitted
· Car Declaration
· RC Copy, Insurance Copy & PUC Copy
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Sharing a link from Income tax website. Most reliable… Thanks

https://www.incometaxindia.gov.in/_layouts/15/dit/mobile/viewer.aspx?path=https://www.incometaxindia.gov.in/charts%20%20tables/list_of_benefits_available_to_a_salaried_person_final.htm&k=&IsDlg=0

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@Ankit
Thanks for your detailed information.
If the Employee take the Car on lease instead of Employer does he eligible for Car Lease allowance.
I read some articles saying, Car lease will be applicable only if Car is provided by Company.
Also, what is the limit for the same.

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Hi @Rameshbv

Yes, he is eligible for the Car Lease provided proper documents to be provided.

To be honest, at the end of the day all the above should be treated as Reimbursements and should not be paid with Salary.

Company has to treat this as Expense Reimbursement in their book of accounts.

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Hi
Thanks for detailed info. Can you please also share the declaration, formats to claim reimbursements, log book format etc. That will be very helpful

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Hi @sneham95

These are available in greytHR as a part of Expense Claim / Reimbursement.

We are also building these templates will soon share it - but to automate this, I recommend use a tool like greytHR to help during auditing etc.,

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