1. Employee Case :-
a) If an employee receives free medical treatment or
hospitalization from the employer, such benefit will be exempt from tax.
b) If an employee receives re-reimbursement of medical
expenses under the terms of employment such expenses will be exempt from tax.
c)
If medical allowances are given then 10% of the
basic salary is exempt from tax. Other than employee.
In this case personal expenditure on medical service is
exempt up to 10% of the basic salary.
Conditions :
·
Name of the practitioner and address
·
National tax number of the clinic or hospital
should be given on the bill.
·
Bills should be certified by the employer.
2. Entertainment Allowance :-
Following are the important rules regarding the above
allowance :
a) If an employee spends the amount on entertainment and
this amount is re-imbrued by the employer then such amount is not taxable.
b) If entertainment like tea and coffee provided to the
employee at the office during the working hours is not taxable.
3.
Special Allowance :-
While performing the official duties some allowance are
provided to the employee to meet such expenses. These expenses are called
special allowances. These allowances are not taxable.
4.
Loan To Employee :-
If any receives the loan from his employer without profit or
at the lower rate than the benchmark rate then following rules shall be applied
:
a) No Profit : In
this case profit will be calculated according the benchmark rate and it is
included in the salary.
b) Profit rate paid is less : If profit is paid less than
the benchmark rate then this difference will be included in the salary head.
5.
Utilities Allowance or Fee Provision Of
Utilities :-
Following items are included in the utilities :
·
Electricity
·
Gas
·
Water
To meet above expenses employer pays some amount to
the employee which is called utilities allowance. Such amount is not taxable up
to 10% of the minimum time scale.
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