Question

Explain legal issues in compensation? What is considered to be taxable compensation and what allowances are not ?​

Answer 1

Answer:

The laws of compensation and work hours are very complex. An employer with best intentions could also commit mistakes while going through the various terms and conditions. It is really tough to judge which employees are perfectly immune and not exempt from lowest amount of wage.

Explanation:

This type of allowance is paid to employees for commuting to their work place from home every day. If a conveyance allowance is less than ₹ 1,600, then it will be considered as non-taxable. The allowance is exempted up to ₹ 1,600 only, any amount more than that will be taxable as per income tax act.