Hi Abhash, Sandeep here. Thanks for today's session on Comp. Can you help to understand more on Gadget Allowance and tax benefit around the same?

@Sanjana Sah Would like to now more on Gadget Allowance

Hi guys, Gadget allowance is a type of tax saving allowance which can be added to the salary structure, under the "Special Allowance" component. It can be availed by employees through a Flexible Benefit Plan(FBP) - which allows them to claim tax exemption by submitting incurred bills against the allowances which are part of the FBP. Common allowances which form a part of this are LTA (Leave Travel Allowance), Fuel allowance, Communication Allowance (for broadband and phone bills), gadget allowance etc. As an example, if you have an annual gadget allowance of say 1Lakh, forming a part of your annual Special allowance component - you can claim a tax exemption on upto 1Lakh of expense incurred on purchase of a gadget (mobile phone, tabs etc) - meaning that this 1Lakh will now be tax free. Please note, while the organisation can decide the limit & coverage of this gadget allowance - it must be ensured that the gadget is being used for both official & personal uses by the employee, and not for purely personal use. Hope this helps!

Thanks sanjana. We also have similar component that is clubbed with communication policy and list of communication devices are mentioned which the employees can consider by producing the bill and the amount is non taxable

@Sanjana Sah We do have the gadget allowance. Is it mandatory for the employees to submit purchase invoice in the name of the company or they can invoice on their personal name?

Thanks a lot @Sanjana Sah I was under the impression that there’s a std deduction of 50k nowadays and no exemption except for LTA. Is there a certain group that falls under these exemptions or is applicable to all ?