Hi everyone,
I need to do salary restructuring and introduce non taxable salary heads, can anyone suggest me to introduce such heads which will help in salary restructuring from tax benefit pt. of view.
We already have HRA, medical, conveyance, lta in our salary structure.
Alternatively, can anybody help me with details of tax consultants who could help in designer salary packages for tax benefits for high salaried employees for whom tax liability is more.
:icon14:
Regards
Priya
From India, Mumbai
1I need to do salary restructuring and introduce non taxable salary heads, can anyone suggest me to introduce such heads which will help in salary restructuring from tax benefit pt. of view.
We already have HRA, medical, conveyance, lta in our salary structure.
Alternatively, can anybody help me with details of tax consultants who could help in designer salary packages for tax benefits for high salaried employees for whom tax liability is more.
:icon14:
Regards
Priya
From India, Mumbai
Priya,
under non taxable head you can add Sudexho Coupons-these coupons are welcomed by employees-and allow them to purchase meals,grossary on can add them according to grade
like Juniour Level -You can offer Sudexho Vouchers of Rs 500 every month
Middle Lever -Rs 750/-
High level -1000/- and so on
For query
http://www.sodexho.co.in
Many corporates are using these vouchers.
For further clarificartions you can contact me at
From India, Hyderabad
under non taxable head you can add Sudexho Coupons-these coupons are welcomed by employees-and allow them to purchase meals,grossary on can add them according to grade
like Juniour Level -You can offer Sudexho Vouchers of Rs 500 every month
Middle Lever -Rs 750/-
High level -1000/- and so on
For query
http://www.sodexho.co.in
Many corporates are using these vouchers.
For further clarificartions you can contact me at
From India, Hyderabad
Hello,
Sodhexo is an option but administration of sodhexo's can become a real pain in big organizations, every month it becomes a repetitive process. If we have the administrative help then it is a gud option.
Anyone has any idea on having fringe benefit being introduced so as to reduce the tax burden on employees.Plz send in any information you may have.
Regards
Nidhi
From India, Gurgaon
Sodhexo is an option but administration of sodhexo's can become a real pain in big organizations, every month it becomes a repetitive process. If we have the administrative help then it is a gud option.
Anyone has any idea on having fringe benefit being introduced so as to reduce the tax burden on employees.Plz send in any information you may have.
Regards
Nidhi
From India, Gurgaon
Hi!!! Priyashiva
I hope this helps u....I think a list of partially exempt allowances will make it a little easy 4u 2understand how to go about it coz it did help me when I was working on the salary structure of my organization.....I do have a list of fully taxable allowances if u need I'll post it....
Regards
Himani
PARTIALLY EXEMPT ALLOWANCES
This category includes allowances which are exempt upto certain limit. For certain allowances, exemption is dependent on amount of allowance spent for the purpose for which it was received and for other allowances, there is a fixed limit of exemption.
(i) House Rent Allowance (H.R.A.)
An allowance granted to a person by his employer to meet expenditure incurred on payment of rent in respect of residential accommodation occupied by him is exempt from tax to the extent of least of the following three amounts:
a) House Rent Allowance actually received by the assesses
b) Excess of rent paid by the assesses over 10% of salary due to him
c) An amount equal to 50% of salary due to assesses (If accommodation is situated in Mumbai, Kolkata, Delhi, and Chennai)
‘Or’ an amount equal to 40% of salary (if accommodation is situated in any other place).
Salary for this purpose includes Basic Salary, Dearness Allowance (if it forms part of salary for the purpose of retirement benefits) ,Commission based on fixed percentage of turnover achieved by the employee.
The exemption of HRA depends upon the following factors:
(1) Basic Salary (3) Rent paid
(2) Place of residence (4) HRA received
Section 16 (ii).
(i) Special Allowances for meeting official expenditure
Certain allowances are given to the employees to meet expenses incurred exclusively in performance of official duties and hence are exempt to the extent actually incurred for the purpose for which it is given. These include traveling allowance, daily allowance, conveyance allowance, helper allowance, research allowance and uniform allowance.
(ii) Special Allowances to meet personal expenses
There are certain allowances given to the employees for specific personal purposes and the amount of exemption is fixed i.e. not dependent on actual expenditure incurred in this regard. These allowances include:
a) Children Education Allowance
This allowance is exempt to the extent of Rs.100 per month per child for maximum of 2 children (grand children are not considered).
b) Children Hostel Allowance
Any allowance granted to an employee to meet the hostel expenditure on his child is exempt to the extent of Rs.300 per month per child for maximum of 2 children.
c) Transport Allowance
This allowance is generally given to government employees to compensate the cost incurred in commuting between place of residence and place of work. An amount uptoRs.800 per month paid is exempt. However, in case of blind and orthopaedically handicapped persons, it is exempt up to Rs.1600p.m.
I hope this helps u....I think a list of partially exempt allowances will make it a little easy 4u 2understand how to go about it coz it did help me when I was working on the salary structure of my organization.....I do have a list of fully taxable allowances if u need I'll post it....
Regards
Himani
PARTIALLY EXEMPT ALLOWANCES
This category includes allowances which are exempt upto certain limit. For certain allowances, exemption is dependent on amount of allowance spent for the purpose for which it was received and for other allowances, there is a fixed limit of exemption.
(i) House Rent Allowance (H.R.A.)
An allowance granted to a person by his employer to meet expenditure incurred on payment of rent in respect of residential accommodation occupied by him is exempt from tax to the extent of least of the following three amounts:
a) House Rent Allowance actually received by the assesses
b) Excess of rent paid by the assesses over 10% of salary due to him
c) An amount equal to 50% of salary due to assesses (If accommodation is situated in Mumbai, Kolkata, Delhi, and Chennai)
‘Or’ an amount equal to 40% of salary (if accommodation is situated in any other place).
Salary for this purpose includes Basic Salary, Dearness Allowance (if it forms part of salary for the purpose of retirement benefits) ,Commission based on fixed percentage of turnover achieved by the employee.
The exemption of HRA depends upon the following factors:
(1) Basic Salary (3) Rent paid
(2) Place of residence (4) HRA received
Section 16 (ii).
(i) Special Allowances for meeting official expenditure
Certain allowances are given to the employees to meet expenses incurred exclusively in performance of official duties and hence are exempt to the extent actually incurred for the purpose for which it is given. These include traveling allowance, daily allowance, conveyance allowance, helper allowance, research allowance and uniform allowance.
(ii) Special Allowances to meet personal expenses
There are certain allowances given to the employees for specific personal purposes and the amount of exemption is fixed i.e. not dependent on actual expenditure incurred in this regard. These allowances include:
a) Children Education Allowance
This allowance is exempt to the extent of Rs.100 per month per child for maximum of 2 children (grand children are not considered).
b) Children Hostel Allowance
Any allowance granted to an employee to meet the hostel expenditure on his child is exempt to the extent of Rs.300 per month per child for maximum of 2 children.
c) Transport Allowance
This allowance is generally given to government employees to compensate the cost incurred in commuting between place of residence and place of work. An amount uptoRs.800 per month paid is exempt. However, in case of blind and orthopaedically handicapped persons, it is exempt up to Rs.1600p.m.
Hello,
I just need add to the last post.... the various alowances mentioned under specia allowance do not come under that sub-heading..any amount in special allowance is a fully taxable component of the salary. Plz note that special allowance is the balancinf figure in the salary break up.
Warm Regards
Nidhi
From India, Gurgaon
I just need add to the last post.... the various alowances mentioned under specia allowance do not come under that sub-heading..any amount in special allowance is a fully taxable component of the salary. Plz note that special allowance is the balancinf figure in the salary break up.
Warm Regards
Nidhi
From India, Gurgaon
Hi everyone,
I need to do salary restructuring and introduce non taxable salary heads, can anyone suggest me to introduce such heads which will help in salary restructuring from tax benefit pt. of view.
We already have HRA, medical, transport, metro, supplememtary, conveyance, lta , grauity, leave encashment in our salary structure.
Alternatively, can anybody help me with details of tax consultants who could help in designer salary packages for tax benefits for high salaried employees for whom tax liability is more.
Please mail it to
Regards,
Kirti Parab
From India, Mumbai
I need to do salary restructuring and introduce non taxable salary heads, can anyone suggest me to introduce such heads which will help in salary restructuring from tax benefit pt. of view.
We already have HRA, medical, transport, metro, supplememtary, conveyance, lta , grauity, leave encashment in our salary structure.
Alternatively, can anybody help me with details of tax consultants who could help in designer salary packages for tax benefits for high salaried employees for whom tax liability is more.
Please mail it to
Regards,
Kirti Parab
From India, Mumbai
Hi kirti,
You may check this, driver's salary and petrol reimbursement at higher level is possible, i think their is also attire reimbursement. Any component routed from salary or introduced as salary head becomes a taxable income. If the company allowance you can introduce voucher payments. Instead of normal tax one can do away with introduction of such salary heads which attract fringe benefit tax which is lower then normal tax rate. However for such salary heads where it attracts fringe benefit tax it should be borne by employee or else co. can bare it on the grounds of employee welfare.
regards
Priya
From India, Mumbai
You may check this, driver's salary and petrol reimbursement at higher level is possible, i think their is also attire reimbursement. Any component routed from salary or introduced as salary head becomes a taxable income. If the company allowance you can introduce voucher payments. Instead of normal tax one can do away with introduction of such salary heads which attract fringe benefit tax which is lower then normal tax rate. However for such salary heads where it attracts fringe benefit tax it should be borne by employee or else co. can bare it on the grounds of employee welfare.
regards
Priya
From India, Mumbai
Can FBT be borne by the employees...
Like I can introduce choice pay instead of special allowance....nd the employees can use these benefits according to their needs nd tax benefits and pay the FBT themselves instead of paying income tax...So win-win situation for employer as well as employee?
From India, Madras
Like I can introduce choice pay instead of special allowance....nd the employees can use these benefits according to their needs nd tax benefits and pay the FBT themselves instead of paying income tax...So win-win situation for employer as well as employee?
From India, Madras
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Salary heads.xls
Salary-Note.doc