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How to Claim I-T Exemption On Relocation Allowance

It is exciting equally as well as stressful thing  to shifting goods to a new place for a job. Physical and emotional upheaval is required for moving. Some financial implications also take place in this. Like finding a good neighborhood, house hunting, hiring a shifting company, etc. Relocation allowance is here what is needed. There are several tax implications in this. In this blog, you will learn this only, that is only about tax implications and income tax exemption. These things are included for shifting, in India.

Relocation and Relocation Allowance

Relocation is the process of moving goods from one place to another. It could be for anything. Personal reasons, education, job transfer, moving to a city, etc. Job transfer or job change is the main reason for shifting in India. Suitable job compels people to relocate. At least 79% of people do this.

The relocation allowance was provided by the employer to his employee if the company asked to do the relocation. This is to cover the cost of the move. Many expenses are included in this. Like, packing, temporary accommodation, transportation, etc. Income tax exemption is also associated with it. Income tax exemption should be claimed while relocating. Documents, evidence of payments, and any agreements with your employer must be kept. This may become necessary during the transfer. These should be counted as business expenses by the employer in his accounts book. Adequate documentation should be retained as this is crucial. This will help in maintaining compliance with tax requirements. More than the actual expense if the employer pays the relocation allowance to the employee, the difference will change. It will become taxable as salary income, this will be for the employee.

Tax exemption and taxable expenses:

Some tax exemptions on relocation allowance are:-

Income tax exemption:

Packing, and moving services- Packing and moving are directly related to the transfer. House shifting services, if you hire any, will also tell you this.

Initial accommodation– Exemption is followed for the cost of the first 15 days of relocation.

Flight or train fare– Exemption is done here also. As transportation expenses are incurred here. For those who are shifting from one location to another.

Car registration– This is also exempted from the registration of the car used for travel during relocation.

School admission– This is taxable as this comes under monetary benefit.

New residence– For the new residence your employer can pay you an allowance. Then you should show them your taxable income.


How to Check the Eligibility?

  1. Consult your HR manager or accounts officer to check the eligibility
  2. Once after getting the information, ask them the maximum allowance limit
  3.  Now, take quotes from GST registered Packers and movers like Pro Cochin House Shifting and Moving Packers
  4. Ask them to Share the quote.
  5. Submit it to the HR / Accounts manager
  6. Usually, it approved within 7 days

Happy relocating with Pro Cochin Movers

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