How does reimbursement component in the salary work?

I receive Rs.5, 000 as cash towards phone and entertainment reimbursement from my employer in my cost-to-company (CTC) package. However, at times, I do not spend the entire amount and so cannot produce bills each month. Can I ask them to add this reimbursement amount to my basic instead? - Vivek Bansal, Hyderabad

Normally, a reimbursement component by way of cash component is provided to reduce the employees’ tax outgo. The reimbursements may not always be on actual spends. So, check with the accountant in your office if you can claim it without producing bills. If you can do so; it is best. The problem when you add this sum to your basic salary is that you will be accordingly taxed on this higher sum, unlike the case when you claim the reimbursement.   

olmdesk@outlookindia.com