My job involves a lot of traveling. The expenses I need to pay by myself, and after submission of bills, my company reimburses me, which comes to my salary savings bank account. I need to understand if all the credits to my savings bank account are taxable, or will you advise me to open a reimbursement account.
From India, Pune
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From India, Pune
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Dear friend,
Let me explain in simple language. "Income Tax" is always on the income of the employee or the earnings of the employee. In your case, you spent some money to book tickets, hire a cab, etc. This is considered expenditure. The company simply reimburses the amount spent on their behalf. How can there be tax on this amount?
To avoid confusion, I recommend providing Form-16 to your CA. Additionally, provide him with the bank statement. In the bank statement, circle the non-salary credits. This will help your CA understand what is income and what was reimbursement.
Thanks,
Dinesh Divekar
From India, Bangalore
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8219Let me explain in simple language. "Income Tax" is always on the income of the employee or the earnings of the employee. In your case, you spent some money to book tickets, hire a cab, etc. This is considered expenditure. The company simply reimburses the amount spent on their behalf. How can there be tax on this amount?
To avoid confusion, I recommend providing Form-16 to your CA. Additionally, provide him with the bank statement. In the bank statement, circle the non-salary credits. This will help your CA understand what is income and what was reimbursement.
Thanks,
Dinesh Divekar
From India, Bangalore
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I fully endorse Dinesh. Also as a precaution, its always better to have a separate reimbursement account or still better to use Corporate Credit cards for such purposes.
From India, Mumbai
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From India, Mumbai
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Reimbursements are not taxable. Some employers facilitate opening a bank account for reimbursements alone. When I was in L&T, they facilitated the reimbursement account with ICICI. Pon
From India, Lucknow
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From India, Lucknow
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As far as you can produce the supporting bill stating the expenses made for the company, there will be no TDS otherwise it will be treated as an income and tax will be deducted
From India, Mumbai
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From India, Mumbai
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Let me narrate my scenario which is quite similar. I'm a retainer/consultant with a reputed company and submit monthly consultancy fees bill and get paid for the same each month. In the same monthly bill, I also put claim amounts for some reimbursements like mobile, local conveyance spent on company business. When I get paid, they deduct 10% TDS on the total amount (including fees and reimbursements) and also later provide me TDS certificate (Form 16A) for the deductions. I had inquired with them but their finance says it's as per law. In their wordings, "As per IT Act 1961 they have deducted 10% Flat on all my Claims & Fees".
Let me know if this is correct.
From India, Greater+Noida
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Let me know if this is correct.
From India, Greater+Noida
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Hello,
The opinion of Mr. Isarahmed is correct to the extent that the company deducts the income tax at 10% on all his reimbursements as he falls under the professional fee category. He is not an employee of the company. Actually, the reimbursements for company business work such as transport, tour, and travel, etc., are not taxable and are not a part of the CTC. Mr. Isarahmed would have to claim an income tax refund by showing these reimbursements as his expenses in his income tax return.
If you are an employee of the company and you are sent on a tour for company business, then in that case, all the tour and travel expenses are not a part of your CTC and do not attract income tax. It does not matter whether these are deposited along with your salary or as a separate one in your salary account or another account in the bank.
From India, New Delhi
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The opinion of Mr. Isarahmed is correct to the extent that the company deducts the income tax at 10% on all his reimbursements as he falls under the professional fee category. He is not an employee of the company. Actually, the reimbursements for company business work such as transport, tour, and travel, etc., are not taxable and are not a part of the CTC. Mr. Isarahmed would have to claim an income tax refund by showing these reimbursements as his expenses in his income tax return.
If you are an employee of the company and you are sent on a tour for company business, then in that case, all the tour and travel expenses are not a part of your CTC and do not attract income tax. It does not matter whether these are deposited along with your salary or as a separate one in your salary account or another account in the bank.
From India, New Delhi
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Your case has been treated as payments to "Consultant" deducting TDS @ 10% u/s 194 J as a precaution to avoid penalty & interest for failure of deducting TDS & remitting to govt. However, you can claim a deduction from Business/Profession income for expenses incurred towards travel, etc., as these are supported by bills.
From India, Bangalore
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From India, Bangalore
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Dear Mr. Isar Ahmad,
Since you are not an employee but an external consultant, what your client is doing is correct, i.e., deduction of tax for all the payable. Let me suggest one option to escape from TDS on supplementary claims. I recommend you raise the invoice for your consultancy charges. These charges are taxable under Section 194J of the IT Act 1961.
For all your supporting bills such as transportation or mobile bills, claim them separately and take the cash from the accounts. Do not consolidate all the bills and raise a reimbursement invoice, as this invoice will also be taxable. The better solution is to raise a voucher for each claim separately. Just attach a summary of the claim on white paper. Before doing this, check with the accounts department whether they are ready to accept bills for the local claim. If not, then you will have to continue with the existing procedure.
Ok...
DVD
From India, Bangalore
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Since you are not an employee but an external consultant, what your client is doing is correct, i.e., deduction of tax for all the payable. Let me suggest one option to escape from TDS on supplementary claims. I recommend you raise the invoice for your consultancy charges. These charges are taxable under Section 194J of the IT Act 1961.
For all your supporting bills such as transportation or mobile bills, claim them separately and take the cash from the accounts. Do not consolidate all the bills and raise a reimbursement invoice, as this invoice will also be taxable. The better solution is to raise a voucher for each claim separately. Just attach a summary of the claim on white paper. Before doing this, check with the accounts department whether they are ready to accept bills for the local claim. If not, then you will have to continue with the existing procedure.
Ok...
DVD
From India, Bangalore
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In my job, I do extra work like conducting exams for various departments such as posts, banks, etc. I will be paid as the Chief Examiner, Chief Superintendent, etc., which I may receive around Rs. 3,000 to Rs. 6,000 quarterly or every six months. Since the amount exceeds Rs. 500, it will be issued as a crossed cheque, which I need to deposit into my bank account. Is this income taxable to me?
Kindly reply as solicited.
From India, Hubli
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Kindly reply as solicited.
From India, Hubli
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