WHT And Expense

[Omeir]

If one is a Director in a private ltd company and if the mobile connection is in his personel name, can the company claim the mobile expenditure?
Secondly the WHT tax charged by the compnay will be adjusted against whose income, directors or company's?

Would it be right for the company to claim the expenses and adjust the WHT tax in the tax of director for his rumeneration?

[awaisaftab]

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by Omeir</i>
<br />If one is a Director in a private ltd company and if the mobile connection is in his personel name, can the company claim the mobile expenditure?
Secondly the WHT tax charged by the compnay will be adjusted against whose income, directors or company's?

Would it be right for the company to claim the expenses and adjust the WHT tax in the tax of director for his rumeneration?
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">

Dear Omeir,

A company can provide any type of prerequisites to its employees but these benefits and prerequisites shall be included in the employee's income while determining taxable income unless any part or full exemption is available under any provision of ITO,2001. The mobile facility is currently provided by many companies to employees at free of cost. This mobile expense is admissible deduction and a company can treat it as an expense but mobile charges shall be included in the income of any employee availing mobile facility.
Here, a company cannot claim WHT deducted on mobile if the connection is in the name of employee or director because Tax Deduction and Collection certificate is issued by mobile companies in the name of person in which name the connection is issued.

Here question can be raised that how a company or firm can claim mobile phone charges as expense if connection is in the name of director or employee. The answer is that rent agreement is made by employee but rent paid by employer is admissible expense.

But in case if a company gets mobile connections in its own name and provides the same to its employees and directors then WHT deducted can be claimed.

Regards,

Awais Aftab

[faisal_desperado]

Omeir,
Although, Awais has replied correctly, just would like to add few other things with regards to the first reply,
As per under Chapter III, Part II, Clause 12(C)(Summary Being Quoted) All perquisites, <b>other than those which are specifically being provided for the performance of the employee’s duties of employment,</b> will be taxable.
It means those perquisites, which have been provided exclusively for the purpose of employment will be exempt from tax.
With regards to the aforementioned, nature of perquisite is important, it will be added in the income of the director if it is personally used by him,else it will be exempt.(In both the cases, WHT with be setoff against director's Tax Liablity)
Furthermore, where segregation, with regards to the benefit is unexplained, as per common practice, benefits are declared in favour of Employee.


Best Regards,