Jun 072016

Mobile Cell Phone Telephone Allowance Rules Policy Application Form Tax Exemption Under 7th Pay Commission

Many employers all around the globe provide a special allowance to their employees named the mobile phone allowance. Earlier it was given as telephone allowance. But with the widespread use of mobile phones, the employers do provide this small but effective allowance to their employees. However there might be a condition on the company or organization rules on which groups of employees will be given this facility. Those employees who require frequent telephonic interactions and client dealings are mostly given this special mobile allowance. There is always a limit on the monthly bill which is provided by the company.

Mobile Cell Phone Telephone Allowance

  • Mobile Phone Allowance Rules

The mobile allowance which is given to the employees is only for official use. That is the reason, most companies and organizations prefer corporate connections over normal connections. This helps reducing the mobile bills of their employees to some extent. The mobile connection given to the employee is registered only in the name and official address of the employee. In many cases, the employees require to submit their monthly mobile bills to the employer.

  • Mobile phone allowance policy

Apart from the overall salary, this special allowance called the mobile phone allowance is given to the employees of several organizations, both Govt. as well as private. In some cases, the employers fix a monthly limit on the bill on mobile which will be paid by the employer. Also in some cases, the monthly bills are to be submitted after usage and company clears it. Mobile allowance may be pre paid type or post paid type. The mobile phone allowance is exempted from taxation with some criteria.

  • Mobile phone allowance Letter

Some companies or organizations provide this facility by default to their employees. Whereas in some cases, the employees are required to write an application or letter to the concerned authority of the organization for request of availing the mobile phone allowance benefit. Below is a draft letter one may follow:

  • Application for Mobile Phone Allowance

With due respect, myself XYZ is posted in the Sales and Marketing branch of your reputed organization and holding the post of marketing representative. Sir my daily field work requires telephonic interaction with the clients and customers which are solely for the benefit of the organization.

To maintain the client and customer relations, I have to make many phone calls from by personal mobile daily, throughout the day. Sir, I am facing difficulty in managing the high mobile bills every month.

Hence I am requesting you to grant me mobile phone allowance on the organization’s interest so that I can work more efficiently.

  • Mobile phone allowance application form

Several Govt. and private organizations have the by default mobile allowance which is not needed to apply by the employees for reimbursement. They provide a monthly limit of the mobile expenses, borne by the organization. However, some organizations ask their employees to fill up a form of mobile phone allowance to start this special facility. A sample of this form can be viewed from the link: The reimbursement is done only on the post paid type mobile connection which is either supplied by the organization or belongs to the employee.

  • Mobile phone allowance tax exemption

This special category of allowance named the mobile phone allowance is exempted from taxation as per the Rule 3(7) ix of the IT Act. A full tax exemption of 100 per cent is provided by the Govt. on the mobile bill allowance of the employees. For example, if the monthly limit on mobile allowance of an organization is Rs. 2,000. Then the employees of that organization can enjoy tax free mobile phone allowance up to Rs. 2,000. However, beyond this limit, taxes will be applied on the mobile bills. Mobile phone allowance has been a hidden and undiscovered tool of tax savings, which are not exercised by many. But for claiming tax relaxation, the mobile bills per month must be submitted in due time to the organization for its later course of reimbursement.

  • Mobile phone allowance Under 7th Pay Commission 

As per some recommendations of the new 7th CPC, the mobile phone allowance should be increased by a margin of 25 per cent. Also there is a suggestion on the payment of the total allowance in lump sum without the need of filling the mobile allowance form or submitting bills.

Sl. No. Attributes Related Data
1 Name of allowance Mobile phone allowance
2 Types of mobile phone allowance Prepaid and Postpaid
3 Tax exemption Applicable
4 Section of Income Tax for tax exemption Rule 3(7) ix of the IT Act

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