Tax deduction for reimbursements in an employee payslip

You are saying that you would show ₹800 as food and travel reimbursement, however if you want such reimbursement should not be taxable then 1 you need to provide them with food coupons and not actual money and that too ₹50 per day and you can do that only when you have canteen and secondly every employee gets ₹40000 per year standard deduction in FY 18-19 for various allowance which includes travel allowance and ₹50000 in FY 19-20. So I don't think paying this 800 to each employee would increase a huge amount of tax burden and so it's better to deduct TDS and pay accordingly.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Yes reimbursement of food and travel expenses forms part of the salary and liable for TDS deduction. Section 192 deals with the deduction of TDS and section 17(1) deals with the definition of salary.

reimbursement of food expense will be treated as perquisites in the hands of employees and exemption of Rs. 50 per meal per day would be available.

Hello,

Yes, it would attract Tax deduction.

Reimbursements form part of the salary and are liable for TDS.

I hope this answer satisfies your requirement.

Regards,

CA Hunny Badlani

Dear Sir,

Hope you are doing well !!

Yes, tds needs to be deducted on reimbursement of expenses.

Hi

Yes,TDS to be deducted on reimbursement of expenses.

Hope it helps

Reimbursement of expenses should be on the basis of actuals. If you make the payment uniformly @ Rs 800/- per day without taking bills, then it is not reimbursement, but it is an allowance, which is taxable. You need to take the bills from the employee concerned and make payment if they are otherwise eligible and then limit the claims upto Rs 800/day. 

A genuine reimbursement of expenses incurred for official duty and  duly supported by bills is not taxable but an allowance is taxable. 

Hi,

Ideally, you should avoid paying reimbursement along with salary slip. You should pay it on some other date.

Further, reimbursement should be against the actual expenses incurred by the employee. Hence, employee will have to submit bills and fill a reimbursement form. In case bills are not available for small amounts, reimbursement form should be enough.

Hello Sir,

Yes, it will attract TDS.

Reimbursement of expenses are also part of salary.