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1. What is Entertainment Allowance?

 

(i). Entertainment allowance is a taxable allowance that is paid to employees to cover the cost of entertaining clients or business associates. It is usually paid as a fixed amount per month or year.

 

2. Who is eligible for Entertainment Allowance?

 

(i).  The eligibility for entertainment allowance depends on the employer's policies. However, it is generally only available to employees who are involved in sales or marketing, or who have regular contact with clients or business associates

 

3. Treatment of Entertainment Allowance?

 

The amount of entertainment allowance that you can claim depends on your employer's policies. However, there are some general guidelines that you can follow.

1. The amount of entertainment allowance should be reasonable and proportionate to the amount of business that you generate.

2. The entertainment should be for the purpose of discussing business or promoting your employer's interests.

3. You should keep records of all entertainment expenses, including receipts and invoices.

 

4. What are the tax implications of entertainment allowance?

 

Entertainment allowance is a taxable allowance, which means that it is subject to income tax. However, you can claim a deduction for entertainment expenses on your income tax return.

To claim a deduction for entertainment expenses, you must meet the following conditions:

1. The expenses must be incurred for the purpose of discussing business or promoting your employer's interests.

2. The expenses must be reasonable and proportionate to the amount of business that you generate.

3. You must keep records of all entertainment expenses, including receipts and invoices.

 

5. How to claim entertainment allowance?

 

To claim entertainment allowance, you must submit a claim to your employer. The claim should include the following information:

1. The amount of entertainment allowance that you are claiming.

2. The purpose of the entertainment.

3. The names of the people who were entertained.

4. The date and location of the entertainment.

5. The receipts and invoices for the entertainment expenses.

6. Your employer will then review your claim and determine whether it is eligible for payment.

 

Conclusion

 

Entertainment allowance is a taxable allowance that can be claimed by employees who are involved in sales or marketing, or who have regular contact with clients or business associates. The amount of entertainment allowance that you can claim depends on your employer's policies, but you can claim a deduction for entertainment expenses on your income tax return.