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CTC Reimbursements (Original Bills)

Telephone Reimbursement ................................................................................................................................... 2

Car Maintenance & Fuel Self Owned Car ............................................................................................................ 2
Drivers Salary for Self Owned Car ........................................................................................................................ 2
Car Lease Fuel & Driver Reimbursement ............................................................................................................ 3
Leave Travel Allowance ........................................................................................................................................3
Education Allowance ............................................................................................................................................. 3

Investment Proofs (Only Copies)

Section 80 C ............................................................................................................................. 4
Tuition Fees ............................................................................................................................................. 4
Interest on Loan Electric Vehicle [u/s 80EEB]......................................................................................... 4

Mediclaim Insurance… ....................................................................................................................................................... 5

Sec 80D....................................................................................................................................................5

Sec 80 DD… ......................................................................................................................................................... 5

Sec 80DDB............................................................................................................................................. 5

Sec 80 U… .......................................................................................................................................................... 5

House Rent Allowance (HRA) ...............................................................................................................................6

Housing Loan Principal & Interest….............................................................................................................................. 7

Under Construction Property & Pre EMI Housing Interest............................................................................ 7

Income/Loss on Housing Property ................................................................................................................... 8

Higher Education Loan for Claiming Interest ............................................................................................................ 8

Salary Income from Previous Employer for New Joiners ................................................................................... 8

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Q. Telephone Reimbursement:

Can I opt for Telephone Landline Reimbursement and whose name the bill should be?

Telephone reimbursement is available as tax-free component to the extent of your entitlement (i.e. entitlements
may vary based on the grade with a maximum reimbursement cap of INR 20,000 per annum as specified by
IndiaFirst) to meet the expenditure of landline telephone at home.

Please note that as per Income tax rule 3 (7) (IX), Telephone reimbursements can only be provided as tax-free
component subject to the telephone connection being in the name of the employee. Also upholding the spirit of
the Income tax law, we shall also allow telephone reimbursements as tax free component even if the connection
is in the name of the spouse of the employee the relation should be specified in the claim form.

However this is to further inform you that, Telephone reimbursements if in the name of parent or any other
dependents cannot be claimed as tax free. Also only one Telephone connection can be claimed as a tax free
rebate.

As we are categorising mobile reimbursement as a business expense, second mobile connection claim cannot
be claimed as a tax free component under this head.

Q. Process of claiming telephone reimbursement:

E-Bills or Photocopies of the bill to be submitted along with the claim form. Please note the bill period needs to
be for the current financial year (For e.g. for claiming the reimbursement in FY 22-23, the bill generated period
st st
should be for the period from 01 April 2022 - 31 March 2023.)

Q. Car Maintenance & Fuel Reimbursement for Self Owned Vehicle.

Who can claim Car Maintenance & Fuel Reimbursement and how?

As per Income Tax rule 3, in case if it is a self-owned car by the employee, then Fuel and/or Car maintenance
can be claimed as tax free reimbursement, as per the appended grid:

 If the Cubic Capacity of the vehicle is below 1.6 CC: Maximum tax-free reimbursement in a financial year
would be INR 21,600 per annum or INR 1,800 per month*.
 If the Cubic Capacity of the vehicle is above 1.6 CC: Maximum tax-free reimbursement in a financial year
INR 28,800 per annum or INR 2,400 per month*.

Documents to be submitted for Car & Drivers Salary:

 The vehicle registration copy should be submitted every year along with the with the original
reimbursement proofs on Fuel, Maintenance or Insurance of the vehicle.
 The RC book/copy should be in the name of employee only.

Q. Who can claim Drivers Salary? Self Owned Vehicle.

In case of DVP & above level employees, Driver’s salary/wages can be claimed as tax free reimbursement to
the extent of INR 10,800 per annum or INR. 900 per month based on submission of original salary/wage
receipts of the driver along with the claim form. Drivers Salary/wages period should be between April to March
to be claimed in the respective financial year. Wages can also include Bonus and overtime paid to the driver.

Also in case of Car leasing scheme, the entire Drivers wages can be claimed as tax free reimbursement subject
to submission of original salary/wage receipts.

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Q. Car Fuel & Driver Reimbursement for Car Leasing scheme.

In case of employees under Car Leasing Scheme, as per Income tax rule 3, car fuel and driver’s wages can be
claimed to the extent of the limit specified by the company as per grade.

There is no change in the current process of submitting the claim.

Q. How can I claim Leave Travel Assistance?

Leave Travel assistance – Employees can opt for leave travel assistance as per their entitlement specified as
per grade. LTA exemption is granted for travelling anywhere in India along with his family and is exempted,
basis the provisions given below. Family includes spouse, children, parents, brothers and sisters who are wholly
dependent on employee.

 Where journey is performed by Air - Amount of economy class air fare of the national carrier by the
shortest route or the amount spent, whichever is less (proof to be attached boarding pass along with
tickets) or
 Where journey is performed by rail - Amount of 1st A/C rail fare by the shortest route or amount spent,
whichever is less (bill to be submitted Rail-Tickets) or
 Where journey is performed by any other mode - Amount of 1st A/C rail fare by the shortest route or
amount spent whichever is less (Tours & Travel Invoice with details of passenger),
 Only 2 journeys in a block of 4 calendar years is exempt and the current block is 2022-2025 (i.e.
January 1, 2022 to December 31, 2025).

Employee has to submit proofs of actual expenditure incurred on such journeys. No other expenditure like
scooter/taxi charges at both ends, porterage expenses and lodging/boarding expenses will be eligible.
Employee also has to be on Personal Leave for minimum of 4 days.

Q. How can I claim benefit on Education Allowance?

You need to mention the child details in the investment declaration form the limit is INR 100 per month per child
up to a maximum of 2 children is exempt.

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Investment Declaration

Under Investment declaration employee has to fill in the amount they were planning to invest under different
investments plans in financial year 2022-2023 (i.e. from April 1, 2022 to March 31, 2023). Brief details of
different investment plans along with their limits are given below for your easy understanding.

a. Deduction in respect of various investments made (Sec. 80C) – Under this head deduction will made
available in respect of various investments made by the employee. Maximum deduction available is
INR.1,50,000/-.

Following investments are eligible for deduction.

i. Life insurance premium paid on policy of self, spouse, children. (max limit is 10 % of sum assured
policy issued on or after April 1, 2012 & 20% of sum assured before April 2012)
ii. Jeevan Suraksha premium paid for self, spouse, children
iii. Unit Linked Insurance Plan (ULIP only for self, child and spouse)
iv. Mutual Fund Tax Saver Scheme (MF only name of employee)
v. ELSS Tax Saver Scheme (only for self, child and spouse)
vi. National Saving Certificates only name of employee
vii. Public Provident Fund (PPF only for self, child and spouse deposit done only in current financial
year)
viii. 5 years Fixed Deposit Tax Saver (Scheduled bank notified under term deposit in current financial
year for employee only)
ix. 5 years Post Office Deposit
x. Tuition Fees for any two children which includes tuition fees & term fees which does not includes
development fees, donation, payment of similar nature.
xi. Housing Loan principal repayment (Constructed Property)
xii. Stamp Duty / Registration paid for purchase of property.
xiii. Sukanya Samriddhi Account Scheme (For minor daughter, scheme purchased in current financial
Year.)
xiv. National Pension Scheme (NPS Sec. 80CCD I) additional tax benefit INR. 50,000
xv. Pension Plan 80 CCC to keep Annuity Policy in Force.

The beneficiaries as per the Insurance Policy should either be the self individual, spouse or children of
the individual. Life Insurance Premium paid for parents, brother or sister, even if dependent on the
employee, is not eligible.

Q. How do I claim Tuition Fees and what all can be considered

Tuition Fees is eligible only if the same is with respect to any two children of the employee. Receipt of
Payment on account of tuition fees & term fees only is eligible for Deduction as per Tax Rules. Any other
payout like development fees, capitation fees, donation etc. are not eligible. Payment should be to a
University, School, College or other Educational Institution in India for the purpose of full-time education
and includes any payment for play-school, pre-nursery or nursery activities.

Interest on Loan taken for purchase of Electric Vehicle [u/s 80EEB]

The deduction shall not exceed One Lakh Fifty Thousand rupees and shall be allowed in computing the
total income of the individual for the current financial year, subject to following conditions –

(i) the loan has been sanctioned during the period beginning on the 1st day of April, 2019 and ending on
the 31st day of March, 2023
(ii) (ii) the assessee does not own any other Electric Vehicle on the date of sanction of loan.

Documents to be submitted: Current financial year certificate issued by the lending institution / bank.
(Bank statement not accepted).

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Q. Under what section Mediclaim Insurance can be claimed and for whom.

The mediclaim Insurance can be claimed under section (80D, 80 DD, 80DDB, 80 U) as below premium paid
receipt copy to be submitted for current financial year.

a. Medical Insurance Premium (Health Insurance Plan) (Sec. 80D) – Insurance premium paid for self,
spouse and dependent child during financial year 2022-2023 will be eligible for deduction from taxable
income. Max deduction available is INR. 25,000. Additional up to INR. 25,000 can be claimed as
deduction if such premium paid is towards dependent parents. Additional up to INR. 25,000 can be read
as INR. 50,000 if such premium paid is towards senior parents.

Any payment on account of preventive health check-up of the employee or family, (restricted to INR.
5,000 cash payment allowed here). The deduction is available as part of the overall above limit.

b. Deduction in respect of maintenance including medical treatment of a dependent being a person with
disability (Sec. 80DD) - Employee has incurred an expenditure for the medical treatment of a dependent
person with disability. Employee has to furnish a copy of the certificate issued by the medical authority
in Form No. 10-IA. Fixed deduction of INR. 75,000 can be claimed from taxable income. Higher
deduction of INR.1,25,000 shall be allowed where such dependent is a person with severe disability
having disability of 80 percent or more. Persons with Autism, Cerebral Palsy, Mental retardation,
multiple disabilities, etc. will be eligible.

Deduction can be provided only for treatment for dependents of the individual i.e. spouse, children,
parents, brothers or sisters only.

c. Deduction in respect to amount spent on treatment of specified diseases or ailments (Sec. 80DDB)
under Rule 11DD as below :(Medical Original Expense bills to be provided)

Neurological Diseases where the disability level has been certified to be of 40% and above, i.e.
Dementia, Dystonia Musculorum Deformans, Motor Neuron Disease, Ataxia, Chorea, Hemiballismus,
Aphasia, Parkinsons Disease etc.: and Malignant Cancers, Full Blown AIDS, Chronic Renal failure,
Hematological disorders, Hemophilia & Thalassaemia.

Fixed deduction is INR. 40,000 can be claimed from taxable income however, where such person is a
Senior Citizen, the limit shall stand enhanced to INR. 100,000.

Where in respect of any diseases or ailments specified above, the patient is receiving the treatment in
a Government Hospital, the prescription may be issued by any specialist working full time in that
hospital and having a postgraduate degree in General or Medicine or any equivalent recognized
degree. The prescription shall contain the name & age of of the patient, name of the disease or
ailment along with the name, address, registration number and the qualification of the specialist
issuing the prescription. Where, however, the patient is receiving the treatment in a Government
Hospital, such prescription shall also contain the name and address of the Government Hospital.

d. Deduction in case of a person with disability (Sec. 80U) – Employee suffering 40 percent or more than
40 percent of any disability i.e. blindness, low vision, leprosy-cured, hearing impairment, locomotor
disability, mental retardation, mental illness, autism, cerebral palsy and multiple disability will be eligible
for deduction. Employee has to furnish a copy of the certificate (in Form No. 10-IA) issued by medical
authority constituted by either the Central or the State Government. Fixed deduction of INR. 75,000 is
available. Higher deduction of INR.1,25,000 is allowed in respect of a person with severe disability (i.e.
having any disability of 80 percent or above).

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Q. To claim House Rent Allowance benefit what are the mandatory details required.

Following details are required to claim HRA and detailed to be furnished to Income Tax Office without which the
benefit would not be provided

1. Complete address of rented premises

2. Rent paid to the landlord per month
3. Full name of Landlord
4. Complete residential address of the landlord along with proof where landlord he/she actually stays
along with pin code.
5. Landlord PAN is compulsory in case of rent above INR.1,00,000 per annum.
6. Agreement copy is compulsory, monthly rent above INR. 10,000/-
7. Declaration for claiming both HRA & Housing Loan.

Q. Can I claim both House Rent Allowance (HRA) & Housing Loan (Principal Repayment & Interest)?
What happens to be under construction property where I am paying the Pre-Emi Interest?

The Income Tax Act treats HRA and home loan deductions under separate sections independently. The two are
not interconnected to each other. HRA is dealt with in section 10(13A) Rule 2A while home loans are entitled for
tax benefits under section 80C (tax benefit on principal repayment) and Section 24 (tax benefit on interest
payment) of the Income Tax Act.
Citing an example:
Ajit, currently employed with Company A, is staying in a rented apartment in Mumbai and has bought himself a
property in Chennai for which he has taken a home loan. He finds himself in a dilemma while filing tax returns –
“Can I claim both HRA and home loan benefits?” This seems to be a confusing factor for most tax payers.
When Ajit pays rent, under the Income tax act, he is definitely allowed to claim both HRA and home loan
benefits (interest payment and principal repayment).
Let us evaluate various possible situations an individual can find himself in and understand what the income tax
act permits him to do.
1: You live in your own house
You have taken a home loan and residing in the house purchased with it. Since you are residing in your own
house, you will not be able to claim HRA. However, you will be able to claim tax benefits on both, the principal
and interest repaid on the home loan.
2: You own a house in another city
This situation was the one faced by Ajit. He resided in Mumbai but had bought an apartment in Chennai taking
a home loan. Ajit will be entitled to HRA exemption and tax benefits on both, the principal and interest repaid on
the home loan.
3: Your house cannot be occupied at this point (e.g. under construction property).
You have bought a house in Mumbai taking a home loan and you’re currently living in Mumbai in a rented
apartment because the house is under construction. In such a case, you are eligible to claim HRA.
In the case of tax breaks on the home loan, you can claim tax benefits only for your principal before the
completion of your house. Once your house is completed, you can claim tax benefits on the total interest paid
up to the date of completion in five equal installments in five years beginning from the year of completion.

4: You have a house which is ready for occupation, but you cannot reside in it
You have bought a house in Delhi taking a home loan and now you aren’t residing in it but are living in a rented
apartment in Delhi itself for genuine reasons e.g. the house that you have bought is far away from your office. In
such cases, the Income tax act permits the individual to claim HRA and home loan benefits which includes both
principal and interest repaid on the home loan.
Also, please note that if your house remains vacant, then you will still need to pay tax on a notional rent income.

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5: You have rented your own house and currently residing in a rented house
You took a home loan and your house is now ready for occupation. You have rented the same out while you
reside in a rented house. The Income tax act allows you to claim both HRA and home loan benefits. However,
in such a case, since you are the recipient of rent because you have let out your own house, that income is
taxable at your hands.
Now, that we have dealt with all possible situations with regard to availing HRA and home loan tax benefits, let’s
take Ajit’s situation as an example to help you figure out how to avail them.

Calculating tax benefits on HRA:

Ajit earns a basic salary of INR 60,000 per month and has rented an apartment in Mumbai for INR. 40,000 per
month (he is eligible for 50% of the basic pay for HRA exemption, as he resides in a metro). The actual HRA he
receives is INR. 30,000.
These values are considered to find out his HRA tax exemption:
a. Actual HRA allowance from the employer Salary, i.e. INR. 30,000,
b. 50% of the basic salary as he resides in a metro (else 40%), i.e. INR. 30,000, and
c. The actual rent he pays for the house from which 10% of his basic pay is deducted, i.e. INR. 40,000 – INR.
6,000 = INR. 34,000
The value considered for his actual HRA exemption will be the least value of the above figures which is INR.
30,000

Note:
Revenue Stamp is must if the rent payment receipt is above INR. 4,999, If the monthly rent amount is above
INR. 8,333 then PAN of Landlord is must & above INR.10,000 then both Pan & Lease Agreement copy, is must
else HRA exemption benefit will not be extended.

Q. Housing Loan & Interest Section 24

Ajit had purchased an apartment in Chennai for INR. 38 L three years back. He took a home loan of INR. 32 L
to fund this house purchase. So far, this year he has repaid an interest of INR 3.3 L and a principal amount of
INR 2 L.
Section 80C offers tax rebate on home loans Principal up to a limit of INR 1.5 L and Section 24 on interest up to
a limit of INR 2 L.
So, Ajit can utilize upto INR. 2 L on his interest paid and avail the tax benefits in full for the amount paid towards
principal up to INR. 1.5 L.
 Provisional certificate is mandatory the property should be fully constructed and possession
should be taken.
 In case of Joint ownership of house property the percentage of benefit towards owner and co-
owner should be specified in order to consider the same.

Q. Under Construction Property and Pre-EMI housing Interest:

In case of Pre- construction of housing Interest deduction on home loan interest cannot be claimed even if you
have started repaying the housing loan through EMIs.
Often it is seen that housing loan is taken but the possession of the property is received in the next or later
financial year. It may be because the property is not completed or constructed.

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The Section 24 of the Income Tax Act states that if a property is still to be constructed, there will not be any tax
deduction on the interest payment for all of those years.
However, the interest for the pre-construction period can be availed for deduction in five equal
installments from the year the construction is complete.

Q. Income/Loss on Housing Property

Income/Loss from house property is defined as the income/loss occurred from a property by the
assesse. House property includes the building itself and any land attached to the building. Property refers to
any building (house, office building, warehouse, factory, hall, shop, auditorium, etc.) and/or any land attached to
the building (compound, garage, garden, car parking space, playground, gymkhana, etc.). There are many
intricacies and types of house property which is calculated in different ways. Taxability may not necessarily be
on actual rent or income received. If the property is not let out, the tax will be charged on the potential income
the property is capable of yielding.
Note: Please ensure proper details of rent received from tenant should be provided it should be as per
the area where it is located in case proper details are not provided the benefit would not be provided.
http://taxguru.in/income-tax/analysis-income-house-property.html

Q. Under what section Higher Studies loan can be claimed and for whom.

Deduction in respect of repayment of loan taken for higher studies (Sec. 80E) – Only repayment of interest on
loan taken for pursuing higher education of self, spouse and dependent children will be eligible for deduction
without any limit. This deduction is available in the year in which employee starts paying interest and 7
immediately succeeding years (or until the above interest is paid in full, whichever is earlier). Loan must be
taken from any bank, financial institution provisional certificate need to be provided for the financial year.

 Provisional Interest Certificate is Mandatory

Q. Salary Income received from Previous Employer during the Financial Year.

Details of any Salary Income received by the employee from Previous Employer during the Financial year 2022-
23 (New Joinees post 1st April 2022), shall be in consolidated in the Tax Calculation of the employee on the
basis on complete details provided by the employee.

Documents submitted with respect to Previous Employer Income shall be considered as below:

Final Tax Computation Sheet along with company seal from the Previous employer shall be considered as a
valid document for inclusion of previous employment. Employee should ensure that complete income details
have been provided by the previous employer up to his last working day.

Please note including previous employer income may result in a higher taxable income thereby resulting in
additional tax liability, therefore, please consult your CA/Tax consultant for further advice.