Tax saving Reimbursements - Zeta Tax Benefits - Zeta

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Employee Tax Benefits
- A Ready Reckoner
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PREFACE
Come April 2018, and all your employee salary
structures are going to undergo an overhaul to
accommodate the Standard Deduction that Budget
2018-19 has reintroduced. Now your employees get
a flat deduction of Rs 40,000 on their taxable
salaries, in lieu of medical reimbursements and
conveyance allowance. The bittersweet deal here
is that while a tonne of paperwork has been
reduced for HR managers with these benefits
gone, two of the most well-received tax-saving
components have been taken away from employees.
Also, the Standard Deduction does not imply more
tax savings for them. One of the key factors
influencing employee engagement and retention is
the kind of benefits available to employees. NOW
is the time to make salary packages more
lucrative. We bring you a ready reckoner that
gives you an overview of the other tax-saving
employee reimbursements you can add to your
employees pay structures. Take a moment to look
at some of the most important employee
reimbursements that can help you make salary
packages more appealing and increase employee
take-home by as much as Rs 80,000 a year.
Now is the time to
RETHINK employee benefits
REVISE salary structures
RETAIN employees
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Fuel reimbursements for company owned cars
Fuel reimbursements and driver salary
reimbursements towards a vehicle used wholly for
official purposes by an employee
What it is
Fuel, maintenance and drivers salary for four
wheelers
What it covers
Employers certificate on expense incurred, fuel
bills and log book of journeys taken
Docs required
Amount spent fully exempt of tax if vehicle is
used only for official purposes
Benefit
Usage Max value of perquisite per month Max value of perquisite per month Monthly tax applicable (Assuming 30 slab) Monthly tax applicable (Assuming 30 slab)
Engine capacity lt1600cc gt1600cc lt1600cc gt1600cc
Official purpose No cap No cap Exempt Exempt
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Fuel reimbursements for vehicles owned by
employees
Fuel reimbursements and driver salary
reimbursement towards vehicle used partly for
official and partly for personal purposes by an
employee and their household members
What it is
Fuel and maintenance towards four / two wheelers.
Also drivers salary for four wheelers
What it covers
Only fuel bills to be submitted
Docs required
Tax exemption is capped at a predefined value.
Expenses incurred over and above are taxed as
per applicable tax bracket
Benefit
Usage Max tax exemption per month Max tax exemption per month Monthly tax applicable (eg. monthly expense Rs. 10k tax slab of 30) Monthly tax applicable (eg. monthly expense Rs. 10k tax slab of 30)
Engine capacity lt1600cc gt1600cc lt1600cc gt1600cc
Official personal (In INR) (Added Rs. 900 drivers salary) 2,700 3,300 2,190 2010
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Communications reimbursements
Mobile reimbursements, broadband reimbursement
and other communications expenses incurred by an
employee on behalf of their employer, as part of
work.
What it is
Landline phone, mobile (postpaid, prepaid) and
internet/ data card connections
What it covers
No maximum limit mentioned by the Income Tax Act.
Can vary as per company policy
Max perquisite
Landline, mobile and internet bills, in the name
of the employee, to be submitted
Doc required
Mobile phones and internet is extensively used
by employees across tax slabs and hence would be
availed Savings for employees
Benefit
Assuming avg eligible limit Annual value of perquisite Yearly tax saving _at_30 slab
Rs. 2,500 / month Rs. 30,000 Rs. 9,000 p.a.
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Books periodicals
Research allowance granted to employees in order
to encourage academic and other professional
pursuits
What it is
Magazines, book periodicals
What it covers
No maximum limit mentioned by the Income Tax. Can
vary as per company policy
Max perquisite
Proof of purchase. Companies can decide as per
their policies which type of books periodicals
to be reimbursed
Doc required
Encourages employees to focus on enhancing
knowledge that would help them perform better
Benefit
Possible savings for employees
Assuming avg eligible limit Annual value of perquisite Yearly tax saving _at_30 slab
Rs. 2,500 / month Rs. 30,000 Rs. 9,000 p.a.
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Asset / gadget reimbursements
Gadget reimbursements are for movable assets used
only by the employee, majorly for official
purposes can be claimed for tax exemption
What it is
Laptop, computers, mobile phones, pen drives etc
What it covers
Fully exempt - Laptop/ computer (no upper
limit) 90 tax exempt - Other gadgets (incl
mobile)
Max perquisite
Any invoices or bills for assets/ gadgets
purchased to be in the name of the organisation
Doc required
Tax-saving advantage on purchase of mobile and
computers that are extensively used for official
purpose Savings for employees
Benefit
Assuming avg eligible limit Annual value of perquisite Yearly tax saving _at_30 slab
Rs. 3,250 / month Rs. 39,000 Rs. 11,700 p.a.
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Leave travel allowance (LTA)
Travel concession for employees from their
employer for themselves and family for travel
within India
What it is
Domestic travel expenses for airplane, train, bus
etc
What it covers

• No maximum limit specified by Income Tax Act on
  LTA
• 2 journeys in a block of 4 years (Current block
  201821) upto 1 journey per calendar year
• Only to-and-fro travel expenses within India
  can be claimed for travel, during official leave
• Can be claimed for self and dependents
• Cannot be claimed if employee is not a part of
  the trip

Rules
Approved leave application along with travel
tickets, including proof of travel eg. boarding
pass for air travel
Doc required
Encourages employees to take leaves. Keeps them
productive and happy Savings for employees
Benefit
Assuming avg eligible limit Annual value of perquisite Yearly tax saving _at_30 slab
Rs. 5,500 / month Rs. 66,000 Rs. 19,800 p.a.
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