Salary structure

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Taxability of salary (CTC):

What is the exemption one can claim from salary as regards reimbursement in the following cases:

Case:  CTC Rs. 100 (including basic+HRA+medicals+LTA = Rs.60, Bal Rs. 40 mentioned in CTC as reimbursement (Car/petrol reimb, attire, books and others)

Can the balance of Rs. 40 be claimed as non-taxable through the below mode:

If so, does it need to be included in Form 16.

Modes are all for official purposes:

1) petrol/maint of car used for official purpose. In some cases for distant travel, car hire charges paid to travel agency (per bills)

2) Books and periodicals purchased

3) Courses attended for enhancement of knowledge

4)  Attire bills for suits purchased for attending official functions/meetings

 5) Hotel food bills for entertaining clients etc.

AI Summary

Clarification on CTC: Business reimbursements not taxable; allowances taxed as perquisites per income tax rules. A query was raised regarding the taxability of salary components within a Cost to Company (CTC) structure of Rs. 100, where Rs. 40 is allocated for reimbursements such as car expenses, books, courses, attire, and client entertainment. The question was whether these reimbursements can be claimed as non-taxable and if they need to be included in Form 16. The response clarified that these expenses, if reimbursed for actual business purposes, are not part of the CTC and do not appear in Form 16. However, if paid as an allowance, they are considered perquisites and taxed accordingly under income tax rules.