my tax is likely to drop this year

[Rohit Bansal]

sorry am a nerd with financial terminology so please excuse me - here's my story

• I have been working with a company called ABC for the last 6 yrs, they had a pretty flat tax structure (i reckon it was easy for guys like me to understand). for 2013-14 i paid an income tax of 70k
• i have now joined a company called DEF....and here's the twist...each month i am asked to submit petrol bills, driver salary, newspapers bill, mobile+broadband and client expenses for an X amount. Well..i have been submitting these bills (some bills are fudged too) but of late i realised that if i continue to do so for the rest of the year my total tax paid will fall drastically as compared to the last few years.

I want to ask you guys (a) if there are any consequences that since my total tax is likely to fall when compared to previous year. Am sure the income tax guys must have a structure in place to check this, (b) is it mandatory that since my income has risen my tax should also rise? If yes, what would you suggest.

I checked with our CA and he says not too worry..if you are caught then everyone else is and he is confident that this will not be tracked.

What would you suggest - thanks for all your help, in advance

[Guest]

Earlier your company has to pay you fixed salary and accordingly they have deducted Tax, now in your new company they are treating the bills submitted by you as business expenditure and reimbursing you for the same hence the tax on your salary is saved.

AI Summary

Tax liability: employer-classified expense reimbursements can reduce taxable salary but may invite scrutiny. The new employer classifies submitted bills as expense reimbursement treated as business expenditure, reducing taxable salary; the taxpayer worries that a lower tax compared with prior years and some potentially falsified bills may invite scrutiny, while the taxpayer's accountant advises minimal risk and recommends no concern.