How Taxable Salary Wise Components Work?

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  1. Ravindra Naidu

    Ravindra Naidu New Member

    In many of the companies, we have the salary components as...

    1. Telephone & Internet
    2. Sports Club or Gym
    3. Vehicle Fuel & Driver Allowance
    4. Books & Periodicals
    etc...

    Usually, employees are asked to submit proofs/bills for these amounts so that, they will exclude these amounts from the Taxable amount.

    Question 1 - How does this works? Will company be benefited from the Govt?
    Question 2 - What if many employees submit fake proofs? What kind of checks will be there either from company or Govt?
    Question 3 - If employees don't submit proofs, would company need not to pay any tax to the govt?
    Question 4 - If employees submit proofs, would company need to pay any tax to the govt?
     
  2. Sahil Oberoi

    Sahil Oberoi Member

    1. The Company does not benefit from these but the employee benefits from these. If you dont submit the proofs, these will be included in your salary and you would be required to pay tax on these. By asking for proofs, they are in-turn reducing your tax liability.
    2. It is responsibility of the Company HR that fake proofs are not submitted. Moreover, in case of scrutiny - penalty would be levied on the employee as well for fake declarations.
    3. If the employee does not submit proofs - you would be required to pay tax and not the company. The company includes such components in salary for the benefit of the employees only.
    4. The tax would be levied on the employee and not the company
     
    Ravindra Naidu likes this.
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