Taxability of telephone reimbursement provided to employees
If an organization reimburses telephone expenses to its employees, is the reimbursement non-taxable?
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 reduced by the employee’s contribution, if any:
Provided that nothing contained in this clause shall apply to the expenses on telephones including a mobile phone actually incurred on behalf of the employee by the employer.
Rule 3(7)(ix) states that telephone reimbursement is non-taxable in the hands of the employee. However, the following conditions are to be considered in this regard.
1. Telephone connection includes both land line and mobile connections. While there is no explicit reference to data card connection in Rule 3(7)(ix), some experts opine that data card falls under the mobile phone category since a data card is just a SIM card.
2. There is no explicit reference to the maximum number of connections allowed, in the rule. Organizations typically allow one land line and one mobile connection under Telephone Reimbursement for each employee.
3. The connections have to be in the name of the employee.
4. Employees should submit telephone bills to their organization while seeking telephone reimbursement.
5. Expenses incurred towards both pre-paid and post-paid mobile connections are admissible for tax exemption.
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What about the internet / data charges with the mobile bill. So many peoples are using internet in their bill and there is a consolidated bill for phone call charges and data uses charges. Is there any such provision that only phone call charges are allowed and internet charges are not allowed for reimbursement ?
No, there is nothing in the law which prohibits data charges.
please tell me prepaid mobile bill can paid on behalf of cashmemo
We are unable to understand your question. Can you please rephrase it?
What about data plans from non-mobile operators like Tikona?
Whether postpaid internet connection from Tikona is covered under telephone/mobile reimbursements?
There is nothing in law which prohibits this.
I’ve landline bills where the address is not where I’m currently employed. Am I eligible for getting the tax exemption for the same ?
There is nothing in the law which prohibits this. There is no reference to the address in the land line bills, in law. If your employer reimburses the land line expense, they can exempt it from income tax.
Hi,
In case employee is getting reimbursed for the telephone expenses from the employer, can he still claim the tax exemption on the same bills.
Thanks & Regards,
Surya
Yes, the telephone expenses reimbursed will not be taxable.
My company has rejected my telephone bills which is submitted for reimbursement.
Reason they say is Invalid Bill.
How can the company reject my telephone bills for reimbursement?
If your company believes that the telephone bill you submitted is not valid, only they can specify the reason. Please check with your company in this regard.
telephone expenses of previous FY can be claimed in this FY, if not claimed before?
Organizations typically do not accept previous years’ receipts for reimbursement in the current year.
Hi,
Is there any limit / amount per month for the telephone reimbursement ?
No, there is no limit.
Hi,
I have changed organization & joined new organization on June 1st, my current organization do not accept mobile bills of May 2015 saying as per income tax rule 1961, 26A we can not accept this however they are considering previous employer salaries for tax deduction. Can you please suggest as per income tax act ?
Regards,
Vipin
Your organization is correct in accepting your previous employment salary details and not accepting your mobile bills pertaining to the previous employment.
is there any max amount of reimbursement as per IT or can we claim actual amount.
There is no maximum amount. You can claim tax benefit to the extent of the actual amount.
Hi,
Can i claim telephone bills of 01/02/2015 to 28/02/2015(F.Y. 2014-15) which is generated on 3rd Mar 2015 as a salary reimbursement in July 2015(F.Y. 2015-16).
Kindly suggest whether we can claim or not?
You should have made the claim in FY 2014-15 itself. Your organization is not likely to accept your claim in FY 2015-16.
my mobile expense reimbursement taxable from employer in form 16. can be i claim for exemption in gross income in ITR at the time of filling.
No, you cannot. The tax benefit can be provided only by the employer.
Landline bill is in the name of my parents. Can i use those bills for my telephone reimbursement.? Please reply ASAP.
No, you cannot. The bills should be in your name.
How to Claim the Telephone Reimbursement for Prepaid Mobile Connections.
You can make the claim by submitting the bill/receipt to your employer.
I would like to know. If i bought mobile handset. is also comes under reimbursement.?
No, it does not.
in telephone bill, due amount and this month charges is available. some time both are differ in amt. which amt is considered for reimbursement in this case.
The reimbursement shall be as per the reimbursement rules in your organization.
Hi,
I have a telephone and vehicle maintenance component in my salary. But what if I don’t want to claim.. Can it be credited as a taxable component in my salary or the amount lapses.
Please suggest.
Thanks..!
It depends on your organization’s reimbursement policy. Most organizations pay the unclaimed reimbursement amounts (which are a part of employee compensation) as a taxable salary towards the end of the year.
Is it counted in “income from salary” or in “income from other sources”?
This refers to telephone expenses reimbursed by an employer (income from salary).
hello, I have telephone allowance . How many mobile and landline bills i can include ? i have 2 prepaid mobile number and 1 landline . Can i include them all ? if yes can i inlude my mothers prepaid bill. its on my name itself.
There is no explicit reference to the maximum number of connections allowed, in the rule. Organizations typically allow one land line and one mobile connection under Telephone Reimbursement for each employee.
The connections have to be in the name of the employee.
Sir, As per my pay slip Telephone allowance given for Rs.1000/- pm out of my total salary 30,000/-pm. I have two post paid connections in my name and spent about Rs.700/- to Rs.1200/- pm (used for personal and office). Can eligible to get deduction of telephone bills on payment basis in my Income Tax Return?. ..plz reply
It may not be possible. You need to claim it through your employer.
Can Staff who are working in telecom companies and getting concessional connection get benefit from payable bills..?
There is nothing in law which prohibits this.
Suppose the company is reimbursing mobile expenses incurred for the office purpose seperately.
apart from this the company is providing mobile allowance as a part of CTC.
Now this mobile allowance is taxable (or) non taxable to the extent of actual expenses though the company is reimbursing mobile bills for official purpose seperately.
What is the treatment?
As per the income tax rules, reimbursement of one mobile phone expense is tax free. Hence, the mobile allowance amount you receive shall be taxable. I presume both the mobile connections are in your name.
The tax benefit is applicable only for the monthly rental and service tax of the mobile bill/broadband bill or it applies for the actual bills incurred as well? please explain. let say my monthly postpaid rental is rs.299 and usage charge is rs.500 and service tax is rs 100, the total actual bill be rs.899. please explain.
The benefit is available to the extent of the total bill amount including rental, usage charges and taxes.
My company is not accepting Prepaid connection…..even if I am providing Payment Receipt along with supporting Bank statement. Is it right? or prepaid connections cannot be used for telephone reimbursement?
There is nothing in the law which prohibits prepaid connection. Not sure why your employer is not accepting it.
I have the same concern. Can you provide any Govt web site link where it is mentioned that Prepaid broad connection also aplicable for tax rebate?
The tax rules only refer to telephone connection, which I presume does not exclude prepaid broadband connection.
I have a prepaid connection and i use online Portals like Paytm, Mobikwik, Freecharge to recharge my numbers.
Bills provided by these portals does not mention any name, just include the number on which recharge is done.
Can i submit these bills for reimbursement??
Yes, you can.
Any reference ?
Reference to what?
Hi ,
CAn i claim Broadband/Telephone exemption during filing IT returns for FY201516? as close to 18K can be exempted. If yes, how do i do it.Plese guide me.Thanks .
No, you cannot claim it through tax return. The way to do it is through your employer.
Hi,
I have a fiber optic cable internet connection (Broadband), this connection is with out a telephone number, there is only customer number. My employer is not accepting the bills as the broad band connection does not have a telephone number. Can you please through some light on this as there are many who have such issue and there is no information on the web. I want to save some money and dont want tax to be computed on the allowance that i get from the company.
Regards
Kumar
The law explicitly allows only telephone (including mobile) reimbursements to be tax free. This is the reason behind your organization not accepting your broadband bills.
If My company dont have policy of reimbursement can i personally claim while doing income tax filing.
Even i want to know about car maintenance .(Company dont have any policy)
No, you cannot. The company has to do the reimbursement for tax benefit.
The telephone bill of March month which is normally received only in April. But the company wants me to submit all the bills before 15th March for tax exemption purpose. then How do i claim my March months? bills?
Your company wants you to submit the bills by March 15th because they need to complete the tasks related to tax calculations ahead of March payroll. You could check with your company on whether they can accept bills until a later date before 31st of March. Unfortunately, there is no easy solution to this problem.
Company is providing Mobile Postpaid sim registered in the name of company
Kindly tell the treatment of pay head of telephone expe in deduction from salary in tally erp 9
If the telephone bill is in the name of the company, you cannot claim any tax benefit.
If the bill is on my husband name and its purchased for my kids usage as both of us are working. But he don’t have this claim policy rule than can i claim that airtime. the address mentioned is my home address
No, you cannot. This bill should be in your name.
I have 2 mobile bill in my name and one is for myself and another one is for my home. I have no landline connection in my name. Can I claim both number?
You can claim the benefit for one mobile phone connection which is in your name.
Hello, I recharge through online portals like freecharge/paytm. How do I get those bills to submit for reimbursement?
If you can submit a printout of the re-charge invoice from the online portal, it should be fine.
Per the law, is proof of expense (i.e. the mobile bill) sufficient to claim reimbursement or does one also need to produce proof of having paid the bill? Our co. requires us to settle the bill before claiming reimbursement and I am trying to understand if this is just an internal requirement.
Alternately, if the company proposes to pay mobile reimbursement along with salary, does it have to deduct tax on it?
“Our co. requires us to settle the bill before claiming reimbursement and I am trying to understand if this is just an internal requirement.”
Ans: The process of reimbursement is as per your organization’s policy. There is no legal requirement in this regard.
“Alternately, if the company proposes to pay mobile reimbursement along with salary, does it have to deduct tax on it?”
Ans: The mobile reimbursement shall be tax-free if you submit the mobile bill to your organization.
if i have two prepaid connection, can i claim each bill in alternative months??
for example: I have sim1 and sim2. can i claim sim1 bill alone for month1 and sim2 bill alone for month2???
Yes, you can.
How can you say that telephone allowance is exempt ?
It is fully taxable.
For reference check the Income Tax Department page.
http://www.incometaxindia.gov.in/Charts%20%20Tables/Allowances_Available.htm
Check column A-20.
If an amount is paid as an allowance under the head Telephone Allowance, it is taxable. If the payment is towards reimbursement of charges incurred for a telephone connection, such a payment is non-taxable as per Rule 3(7)(ix) of the Income Tax Act. When something is paid out as an allowance without any underlying proof of expenditure pertaining to the nature of the allowance, the payment is fully taxable unless it is explicitly exempted by law.
I wish to ask how can anyone claim reimbursement for prepaid number? For prepaid connection, you cannot have any receipt or bill. How is the reimbursement claimed then?
Many outlets provide a receipt of pre-paid connection payments. One could submit a receipt (with the telephone number written) from such an outlet.
My company is not reimburse my telephone bills, can i claim it myself in efiling…
No, you cannot.
HI,
If i have not reimbursed the Landline/Telephone bills from the Public sector company, but i have the bills. Should the Bill amount is exempted from Tax deduction ?
No, you cannot. The reimbursement (and tax benefit) has to be provided by the employer.
Do companies provide telephone reimbursement to employee without asking them to mark personal call. What is the reasonable amount to reimburse per month – like 5K, 10K per month?
Some companies also include self and spouse connection – can we claim tax benefit for both?
1. Yes, companies provide reimbursements without asking them to highlight personal calls.
2. There is no “reasonable” amount specified in law. Companies typically offer Rs 1,000 to Rs 3,000 per month under the head.
3. The connection has to be in the name of the employee and not any other person (including family members).
Dear,
How can i take my tax refund from last two year
please suggest.
You can claim refund by filing your tax return.
On behalf of employees company paid the telephone to vendor directly. Is it liable to deduct the TDS
No.
Does Telephone allowance is for tax exemption from the salary for all government employees?
The tax exemption is available only if the employer pays under a specific head for telephone reimbursement.
Hi,
My employer is providing fixed reimbersment for mobile every month. But this is taxed. Can we file for tax return when filing return. If yes under which section ?
The tax benefit should be claimed through the employer. You cannot claim it through the return.
Hi
My company has rejected by advance payment bill made for 6 months in march saying payment was made in march (Last financial year ).
But since the payment was for current tax year is that correct.
Please suggest.
Not sure what you mean by “advance payment bill”. Companies typically go by the bill date for determining whether it falls in a particular financial year.
By Advance payment i mean, i paid in advance for 6 months(march-august) in the month of march 2016.
I do not think advance payments are accepted for claiming tax benefit.
Hi,
I didnt submit telephone bills with my organisation and they have taxed the allowance, can I rectify it in my income tax return?
You can give it a try. However, the tax department may seek information on the details of the telephone allowance paid etc.
Can I submit Internet connection bill for tax exception as my investment proof?
If your organization pays telephone reimbursement, you can submit the telephone/broadband bill to your organization for the purpose of tax exemption.
Isn’t telephone bill paid by employer on behalf of employee a obligation payment and hence taxable????
No, it is not, since the tax law allows a tax exemption on the same.
Will they check the exact amount in bill is really paid or not? or will my employer have authority to check with my telecom operator for authenticity of my mobile bill?
Please reply
Yes, your employer should check the authenticity of the bill.
Can employee claim full amount before mar?
Yes
My employer provided me an amount for purchase of mobile handset but taxed it based on my tax slab. Can I declare the amount provided by the employer for mobile handset purchase for tax exemption ?
No, you cannot.
Hi,
i received telephone reimbursement from my company though I didnot submitted any bills. Please can you tell me that my company later deduct it from my salary?
If you did not submit any bills, your employer may have taxed the amount fully.
Hello
I have made a payment of around Rs. 10,000 on 28th March, 2018(FY17-18) for a new phone connection. This amount is the 1-year advance rental for the next 12 months. So, I have a payment receipt dated 28.03.2018 but services against this payment will be availed from Apr, 18 to Mar, 19(FY18-19)
So, can I claim tax benefit on this amount next FY i.e. in FY18-19?
So, how do we consider a bill to be eligible for reimbursement as a tax free component in any particular FY? Is it based on payment date or the period in which the services are availed?
Thanks.
It is based on the payment date.
Hi Gautham,
I was checking above post which created in 2013 but you replied to each and every person till 2018. I still I have query related to internet charges reimbursement.
I am working on ecommerce site and due to emergency I support before and after office hours via ( RDC) remote pc and during weekend and holidays too.
1) So Can I claim Internet charges in tax exemption?
2) My salary component don’t have Telephone or Internet charges as component, so shall I ask employer to add it?
3) how much amount I can claim per month?
4) do i have to submit receipt to employer? If yes then sometimes I recharge online and sometime via local shop so how can I give receipt if I recharge from local shop?
5) I recharge high package which included talk time & data pack too so it is fine?
Thanks!
Mike
You can claim tax exemption only if your employer reimburses your telephone/bandwidth expenses. If your employer reimburses your expenses, you need to submit supporting bills.
Hi,
I want to know if I am not reimbursing my telephone bills with my company.. Can I still show it under section 10 A?
Thanks,
Deeksha
No, you cannot.
If telephone allowance is mentioned in our CTC, will it be provided as part of our monthly salary? Can we furnish the paytm bill receipt for prepaid mobile recharge?
If telephone allowance is mentioned in our CTC, will it be provided as part of our monthly salary?
Ans: It may be monthly or of other periodicity such as quarterly or annual.
Can we furnish the paytm bill receipt for prepaid mobile recharge?
Ans: Yes, you can.
Dear Sir,
Could you please provide website reference for the underlying act ?
My previous employer used to accept my mobile, landline and datacard – all bills for tax relief. However, my current employer is saying only one bill to be accepted legally. I gave the landline bill as that has the biggest amount in my case. Now, that also got cancelled saying it has my name as well as my wife’s name !
Could you please advise me some reference here that I may quote in case I stand a valid case ?
Best Regards,
Tanmay
You can read the income tax law at https://www.incometaxindia.gov.in/Pages/acts/income-tax-act.aspx
Hi,
My company do not provide telephone reimbursement option in my salary structure. I would like to know if I can still claim the deduction of telephone bills by reducing the amount from the Gross Salary.
I have e-bills in case of submitting the same.
Thanks,
Piyush
9996105881
No, you cannot.
Under which specific clause of section 10, can I claim the telephone reimbursement allowance as exempted allowance while filing income tax return ?
Or should I choose it under “Any other” heading ?
Telephone reimbursement is listed under Rule 3 of the Income Tax Rules. I presume your employer pays you under a specific head which refers to telephone reimbursement. Else, you cannot claim exemption.
please clarify what is the limit (Time Period) of submission of claim for telephone bills.
Please submit the bills before the end of the tax year.
Telephone facility – 2000/- received from emplyer
So its taxable or not in hands of employee
Non-taxable, if you submit the bills the employer.
My company pays be fixed Mobile ALLOWANCE of Rs. 400 per month, which is paid separately from the salary on a separate day of the month. We do not need to submit any bills to avail the allowance.
However, one of my postpaid mobile phone connections is approved for usage via office order. So, can I claim tax benefit against the actual amount paid for the postpaid mobile connection (comes around Rs. 270 per month) and pay tax for the balance amount (around Rs. 130 per month; of course I will take the exact amounts) without bill cover, by producing the copies of monthly mobile phone bills and payment receipts while submitting tax assessment documents to the office.
My office accounts department is also clueless on the matter.
Your help and direction is highly anticipated.
Yes, you can use the amount you pay for the post paid connection.