financial services · Taxation

All The Employee Benefits You Receive Are Exempted From Income Tax Liabilities

Employees working with private or multinational companies receive many employee benefits and these are counted as non-taxable during income tax filing. There are many types of benefits that many MNCs offer to their employees to ease their daily working life.

The first facility to be mentioned is the cab facility transfer that many companies provide to employees for transporting from and to between office and home. Also, some companies offer travel allowances to use towards office communication. All these expenses are totally exempted from tax liabilities. However, if the transport allowance in more than INR 19,200 then it is the taxable amount and you need to mention it during income tax filing.

Companies that offer a free meal and non-alcoholic beverages are exempt from tax limit for a maximum amount of INR 50/meal. If the company offers coupons for meals than it should not exceed INR 12000/year or else after that limit, it will be liable to get taxed.

Any medical insurance paid by the employer is also exempted from tax liabilities during income tax filing, according to Section 80D of Income-tax Act. The premium paid by the employer is exempted from the tax liabilities as it mostly gets deducted from the employee’s salary. Also, if employees get any gift voucher from the employer then that is also tax exempt and can be claimed during income tax filing.  However, a number of received gift vouchers must not exceed the limit of INR 5000 per every financial year. Also, if employers provide health club allowances for employees then that is also non-taxable amount. However, Tax Authority of India has recommended employers to arrange such facilities for the employees instead of providing allowances.

All these allowances and arrangements are exempted from tax liability but they must need to be mentioned during the income tax filing process.

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