I believe relocation expenses are those that are reimbursed to us as a benefit for joining the company, which are spent from our pocket. Why should these be taxable? Are these expenses really taxable?
Please let me know if you need further assistance.
From United States, Buena Park
Please let me know if you need further assistance.
From United States, Buena Park
u/s 10(14) of I.T. rules, Allowance granted to meet cost of travel on tour or transfer is exempted from income tax. Regards R.Ponraj
From India, Lucknow
From India, Lucknow
Thank you for the response. Can I also get a proper link that describes this section in detail and is from the Government of India IT? I should probably let my employer see this clause. Please let me know.
From United States, Buena Park
From United States, Buena Park
[QUOTE=bharath.ak;1420045]Thank you for the response. Can I also get a proper link that describes this section in detail and is from the Government of India IT? I should probably let my employer see this clause. Please let me know.
Refer here under the heading (iii) Allowances exempted u/s 10(14) Directorate of Income Tax, RSP & PR, New Delhi
Regards R.Ponraj
From India, Lucknow
Refer here under the heading (iii) Allowances exempted u/s 10(14) Directorate of Income Tax, RSP & PR, New Delhi
Regards R.Ponraj
From India, Lucknow
I can see that an allowance is granted to meet the cost of travel on tour or transfer. However, this doesn't mention anything about 'household movement expenses'. Is this by default included in the 'cost of travel on tour or transfer'? Please advise.
From United States, Buena Park
From United States, Buena Park
Dear Bharath,
This may sound like an elaborate answer, but this is how we did it.
- Raise a request for the relocation benefit through the ERP.
- Once the employee travels, he would submit the bills including the air travel for family, truck/roadways bills for shifting household furniture.
- Cars and other vehicles owned by the employee would be offered an amount. However, the octroi would not be a part of the amount.
- The clearance would be made by the Finance team on submission of all the bills. The amount credited through the salary.
The moral of the story is that the amount remained tax-free subject to the bill submission. Although there was a clause in the policy where it was mentioned that if the employee leaves the company within a year of relocation, the amount would be recovered. But as it seems, it's a retention strategy.
Please share if you have further queries.
Regards,
(Cite Contribution)
From India, Mumbai
This may sound like an elaborate answer, but this is how we did it.
- Raise a request for the relocation benefit through the ERP.
- Once the employee travels, he would submit the bills including the air travel for family, truck/roadways bills for shifting household furniture.
- Cars and other vehicles owned by the employee would be offered an amount. However, the octroi would not be a part of the amount.
- The clearance would be made by the Finance team on submission of all the bills. The amount credited through the salary.
The moral of the story is that the amount remained tax-free subject to the bill submission. Although there was a clause in the policy where it was mentioned that if the employee leaves the company within a year of relocation, the amount would be recovered. But as it seems, it's a retention strategy.
Please share if you have further queries.
Regards,
(Cite Contribution)
From India, Mumbai
That's pretty helpful. Thank you.
One last question please, all this applies to a movement from Company A at City 1 to Company B at City 2. It doesn't really apply to 'internal transfers' - i.e., Company A at City 1 to Company A at City 2. Am I correct?
From United States, Buena Park
One last question please, all this applies to a movement from Company A at City 1 to Company B at City 2. It doesn't really apply to 'internal transfers' - i.e., Company A at City 1 to Company A at City 2. Am I correct?
From United States, Buena Park
Hi Bharath,
There is no such rule for this. If the transfer is within the same company but to a different location, or to a different company at a different location, reimbursement is always exempted. I hope I have answered your query.
From India, New Delhi
There is no such rule for this. If the transfer is within the same company but to a different location, or to a different company at a different location, reimbursement is always exempted. I hope I have answered your query.
From India, New Delhi
It is very clearly written in the Income Tax rules as under: "Any allowance, whether granted on tour or for the period of the journey in connection with transfer (including any sum paid in connection with transfer, packing, and transportation of personal effects on such transfer)" is exempt. Directorate of Income Tax, RSP & PR, New Delhi
Regards, R.Ponraj
From India, Lucknow
Regards, R.Ponraj
From India, Lucknow
Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.