Hi Guys! Our company recently offered relocation allowance to employees. The allowance is taxable and some of them had an income tax deduction. I have read train tickets, accommodation, and allowance for movers and packets are exempt from tax. Can they file it in the ITR and receive the amount back? If yes, can someone guide me on how exactly this is done?

What we do is, ask them to file this as reimbursement by submitting the invoice - all our reimbursements are by default exempted from tax so they get the actual bill amount back

If it's an allowance, it will be taxed. Like Bhavya said, if you reimburse relocation expenses against actuals, there is no tax involved. For example, if you are saying that INR 100,000 will be given to an employee as relocation allowance, there will be a tax liability on that. But if you say that the limit is upto INR 100,000 and that employees will need to submit bills to claim, there will be no tax liability because it is a reimbursement (and not income for the employee).

Hey @Shubhangi Negi You can simply ask your employees to request for reimbursement and show that amount as reimbursement instead of direct benefits. On reimbursement, they need not pay any taxes & you won't be liable to deduct any TDS.

Doing this a Reimbursement is usually a cleaner way - And companies usually prefer that

Thankyou @Sumit Singla , @Harender Bisht and @Omkar Pradhan I came to know that the allowance has already been credited to people and the tax was deducted from the allowance. Is there anyway they can claim back the amount with the bills?

Hey @Shubhangi Negi If you have not deposited the TDS on the behalf of those employees, then you can simply reimburse the balance amount against the submitted bills only.

Oh! Understood. Thankyou @Harender Bisht