section 40A(3)

[PRAKASH SINGH]

Employees are transferred from year to year from one place to another. As a company policy, employees are entitled to get reimbursement on expenditure towards transportation of house hold items as well as his/her conveyance(car).

issue is employees are making cash payment exceeding ₹ 10000/- per day to mover and packers(transporter) such as M/s Agarawal Packers & Movers. and claiming reimbursement from employer.

employer is reimbursing through net banking channel to employee.

Question here is whether dis-allowance as per Section 40A(3) will be applicable in the present case to the employer. this is reimbursement case. Section talks about any expenditure whether reimbursement is considered as any expenditure.

Regards

Prakash Singh

[DR.MARIAPPAN GOVINDARAJAN]

In my view no.

AI Summary

Section 40A(3) applicability to employer reimbursement for employee-paid moving expenses answered in the negative advisory. Query: employees pay movers in cash and seek reimbursement from employer, who reimburses via net banking; question whether Section 40A(3) disallowance applies to such reimbursements as 'any expenditure.' Reply: the disallowance is not applicable in the present case, with no further explanation provided.