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Incorrect employee Permanent Account Number (PAN) in Form 24Q leads to problems for both the organization and employees. Organizations spend significant time and incur costs in refiling Form 24Q for correcting mistakes made in earlier filings. We typically come across 3 types of incorrect PAN. 1. Structurally invalid PAN: The PAN of an employee does […]
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Leave a Comment (1) →Section 192 (2B) of the Income Tax Act allows an employee to furnish particulars of income under any head other than “Salaries” for the same financial year and of any tax deducted at source thereon. In other words, an employer can consider an employee’s other income and the tax deducted at source (TDS) on the […]
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Leave a Comment (1) →Jan 2017 update: The ESI wage ceiling has been enhanced to Rs 21,000 with effect from 01-Jan-2017, please take a look at our blog post here. Payroll managers are aware that the existing wage limit (as of Nov 2013) for coverage under the ESI Act is Rs 15,000 (Rupees Fifteen Thousand) per month. Also, that […]
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Leave a Comment (392) →In an earlier post we looked at the conditions governing tax exemption on leave travel allowance (LTA). In this post we will look at the calculation of the tax exemption amount. As mentioned in the earlier post, the exemption is available only on travel expenses (ticket fare etc.) incurred by the employee on leave travel. […]
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Leave a Comment (66) →As a company engaged in the business of payroll processing and statutory compliance related to payroll, we wonder if the tax law governing tax exemption on Leave Travel Allowance (LTA) is the most complex tax legislation in India. Not only is the law difficult to understand and interpret but also quite difficult to implement. Each […]
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Leave a Comment (122) →As per a recent circular issued by the Income Tax Department, employees who pay house rent of more than Rs 1 lakh per annum should submit the Permanent Account Number (PAN) of their landlord to the employer if they wish to claim tax exemption on House Rent Allowance (HRA). This is effective for the tax […]
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Leave a Comment (2) →Let us take a look at the issues payroll managers need to consider while using meal vouchers / food coupons as a head of employee compensation. We will use the terms “food coupon” and “meal voucher” interchangeably in this post. Taxability Many payroll managers mistakenly believe that food and food coupons provided to employees are […]
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Leave a Comment (25) →In the previous post, we had a look at the basis of perquisite calculation on loans provided to employees and members of their household. According to Rule 3 (7)(i) of the Income Tax rules, the taxable value of benefit an employee derives on account of a loan provided to him is equal to the Rupee […]
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Leave a Comment (25) →We find many payroll managers being unaware that loans provided to employees (by the employer) are taxable in the hands of the employees. The typical reactions (from payroll managers) we come across when we talk about taxability of loans provided to employees are as follows. 1. A loan is something that an employee repays. Where […]
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Leave a Comment (34) →Yes, telephone reimbursement provided to employees is not taxable. This is as per Rule 3(7)(ix) (reproduced below) of the Income Tax Rules. The value of any other benefit or amenity, service, right or privilege provided by the employer shall be determined on the basis of cost to the employer under an arm’s length transaction as […]
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