Looking to hire in India

India does not set a statutory deadline for submitting expense claims. Employers set their own timelines, but employees can submit both current-year and prior-year expenses, subject to company policy and client approval, and are encouraged to do so promptly to avoid delays in reimbursement.

Phone, internet, and coworking costs that are necessary for work can be reimbursed tax-free when properly documented. Employees should provide a tax invoice or receipt showing when and where they paid, how much, what service they purchased, and that it relates to them.

Work-related equipment and supplies such as laptops, office equipment, office supplies, software subscriptions, and postal charges can be reimbursed on a non-taxable basis. A tax invoice or receipt must show the date, amount, merchant, description of the purchase or service, and the employee’s name where applicable.

Most business travel costs can be reimbursed tax-free when supported by appropriate documentation. For each trip, employees should provide a tax invoice, receipt, ticket, or booking confirmation that clearly shows the date, amount, merchant, and what was purchased, and includes the employee’s name where required. Public transport within India or abroad has a higher documentation standard once costs exceed a set rupee threshold. Mileage is only non-taxable when a detailed travel log is kept; otherwise it is treated as a taxable allowance.

Everyday meals, groceries, and business meals with clients or partners can be reimbursed on a non-taxable basis when they are work-related and properly documented. For cross-border card payments, employees may also need to provide bank or transaction details showing the vendor and payment.

A range of other business-related costs can be reimbursed, with tax treatment depending on the nature of the expense. Training, promotional items, gifts, utilities, and employer-paid group medical insurance premiums can be non-taxable when correctly structured and documented. Recurring medical costs reimbursed directly to the employee are treated differently and classified as a taxable allowance.

Employers in India do not use per diem arrangements. Employees should submit actual expenses with supporting documentation for approval and reimbursement instead of claiming a daily allowance.

Bonuses in India include contractual and discretionary payments such as incentives and commissions, and are taxed as regular income with applicable social security contributions. When a bonus is paid, it is added to the employee’s taxable income for that month and taxed based on their projected annual taxable income and chosen tax regime, with withholding handled through the normal monthly payroll process. India uses progressive tax rates and withholds tax at source, so the withholding rate in a month that includes a bonus may be higher than usual.