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Pay Sec.

1
SAIL-ISP
PAY SECTION
Pay Sec. 2
PRESENTED BY:



SURESH SIVARAMAN
SR. MANAGER (FIN)-PAY

06-01-2010
Pay Sec. 3
REMUNERATION
1. Salary
2. Perquisites
1. As they existed
2. Consequent upon abolition of FBT
Notification No.
94/2009/F.NO. 142/25/2009-S O(TPL) Dated 18-12-09
3. Profits in lieu of salary (VR comp)
Pay Sec. 4
VERY VERY TASTY
Pay Sec. 5
CAFETERIA APPROACH
Circular No. PL/OD/32/1824
Dated 31-12-2009
Pay Sec. 6
SET OF PERQUISITES
1. Conveyance/Transport (5%)
2. Lunch/Meal coupon (1-5%)
3. Entertainment expenses(5%)
4. Newspaper /Professional literature reimbursement (5%)
5. Education expenses [Schools-5%,College-8%,UG/PG/Prof -10%]
6. Hostel subsidy (5%)`
7. Internet/communication (5%)
8. Professional body allowance (2%)
9. House upkeep allowance (3%)
10. Gardener allowance (3%)
11. Uniform allowance (5%)
12. Self development allowance (10%)
13. Washing allowance (2-3%)
14. LTC/LLTC (15%)
15. Reimbursement of vehicle repair & maintenance (5%)
Pay Sec. 7
PERQUISITES/ALLOWANCES
15 different items
Perks 46% (48 hours per week or more)
Perks 44% (less than 48 hours per week)
Percentage flexibility only under:
Lunch/Meal coupon (1-5%)
Washing allowance (2-3%)
Pay Sec. 8
PAYMENT TERMS
Executive has to give his option
Last Date for submitting option = 10.01.10
Option has to be exercised every year
Option cannot be changed during the year
No option- No perks (44% - 46%)
Earlier related circulars stand withdrawn
Payment- on certification basis
Suspension, EOL cases not eligible
Taxability as per rules
Pay Sec. 9
BEST CHOICES?
No generalised guideline can be provided
for exercising the options as the need and
requirements will vary from individual to
individual.

Only primary consideration should be
whether one can maintain sufficient
authentic documents and produce them
before the I.T.O. in case of scrutiny.
Pay Sec. 10
TAXABILITY
Perks under cafeteria approach which are
specifically mentioned in present and
earlier government notifications.

Perks under cafeteria approach which are
covered in the notification under value of
any other benefit or amenity.
Pay Sec. 11
CONVEYANCE/TRANSPORT
(we are dealing with the more prevalent cars up to 1.6cc capacity)
[5%]
a. Use of one or more cars owned or hired
by employer
b. Use of one Motor car owned/hired by
employer
c. Car owned by employee
d. Two wheeler
e. Transport allowance

Pay Sec. 12
Use of motor car-(a)
i. Car owned/hired by employer
ii. Employee uses more than one car
iii. Usage both official and private
Perks value:
i. One car- Rs.1800 p.m. (+ Rs.900 for chauffeur)
PLUS the following for 2
nd
car
i. Expenditure on running & maintenance
ii. Remuneration of chauffeur
iii. Normal wear & tear- 10% of cost of car
Pay Sec. 13
Use of motor car-(b)
i. Car owned/hired by employer
ii. Usage both official and private
Perks value:
i. Rs.1800 p.m. (+ Rs.900 for chauffeur)
Pay Sec. 14
Use of motor car-(c)
LTE
i. Car owned by employee
ii. Usage both official and private
Perks value:
i. Actual expenditure incurred by employer
LESS
i. Rs.1800 (+ Rs.900 for chauffeur)
Pay Sec. 15
Use of motor car-(d)
i. Employee owns a two wheeler
ii. Usage both official and private
Perks value:
i. Actual expenditure incurred by employer
LESS
i. Rs.900
Pay Sec. 16
Use of motor car-(e)
i. Transport allowance

EXEMPTION
i. Rs.800 p.m.
ii. Rs.1600 p.m. for handicapped
Pay Sec. 17
GARDENER ALOWANCE
[3%]
Actual cost to employer
LESS
Amount paid by the employee for such service
Pay Sec. 18
LUNCH/MEAL COUPON
[1-5%]
Cost to employer for providing
Food and non-alcoholic beverages
Less amount recovered from employee
EXEMPTIONS
Food/beverages provided during working
hours
Non-transferable paid vouchers up to
Rs.50/- per meal, per day
Pay Sec. 19
HOSTEL SUBSIDY
EXEMPTION

Rs.300 p.m. per child
Maximum 2 children

Pay Sec. 20
UNIFORM ALLOWANCE
EXEMPT to the extent such allowance is
spent for official purpose.
There should be an established requirement
of uniforms for official work
- Security department
- CET/RDCIS offices etc.
- Nurse
Pay Sec. 21
OTHERS
Cost to employer based on arms length
transaction
LESS
Amount recovered from employee
EXEMPTION
Expenses on telephone,mobile on behalf of
the employee are not to be taxed.
(Arms length transaction: transaction between two un-related
parties so as to avoid any discriminating practice)
Pay Sec. 22


Pay Sec. 23
SUMMATION
E.g. An employee gets gardener allowance of Rs.1200
p.m. by certifying to the employer about the expenses ; but
on survey, he is unable to prove any disbursement to any
person (gardener). The total amount received by him will
become taxable and he will be subjected to penalty by the
ITO.
The employee should not only certify
the expenditure on different heads, but
he must also ensure that he spends the
money for the purpose for which he
has claimed.
Pay Sec. 24