Tax treatment of furnishing allowance reimbursed to employee
Pawan.Sharma
Dear All,
Kindly provide tax treatment for deduction of TDS from salary as per below details.
At the time of delivery of Appointment letter, employee is told that he will be given amount of Rs 100000/- if he purchases furniture for household and
Submit bills of the same to the employer. Kindly advice whether Rs 100000/-,if claimed by employee in a financial year, will be included in the salary of employee
for the purpose of TDS to be deducted or whether the same will be treated as perquisite. If the same will be treated as perquisite, kindly tell me the valuation method of the same.
Regards,
CA Pawan Sharma
paras kochar
Paras Kochar,Advocate
From: pawan....@shoretoshore.in
To: foru...@googlegroups.com
Subject: [PDRUNGTA] Tax treatment of furnishing allowance reimbursed to employee
Date: Tue, 29 Mar 2011 12:52:13 +0530
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Krishna Moorthy K
Dear All,
Treatment differs based on a particular situation.
1) If the amount is given to the employee for purchase of furnitures, as per the terms of his employment, normally, these furnitures will be treated as assets of the employer and installed at the residence of the employee concerned. At the time of retirement/separation, the assets are sold to the employee concerned at the income-tax WTD value.
In this situation, the cost of furnitures will be treated as perquisites in the hands of the employee concerned and included in the salary for the purpose of deduction of TDS. 10% of the salary
will be included as perquisites for this purpose and tax deducted accordingly.
2) If the amount is given to employees as a refundable loan for purchase of furnitures, there will not be any addition in his salary towards perquisites, as the furniture bought is the asset of the employee concerned and the company has given only refundable loan (either interest free or at nominal interest).
With warm regards,
CS. K. Krishnamoorthy
Bangalore
9980744334
From:
foru...@googlegroups.com [mailto:foru...@googlegroups.com] On Behalf Of Pawan.Sharma
Sent: Tuesday, March 29, 2011 12:52 PM
To: foru...@googlegroups.com
Subject: [PDRUNGTA] Tax treatment of furnishing allowance reimbursed to
employee
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