Key takeaways
- A good policy answers four questions: what is reimbursed, how much, who approves and when it is paid.
- Set grade-wise limits for travel and hotels, and a deadline for claims, such as 30 days.
- Ask for GST invoices in the company name and GSTIN so you can claim input credit where it is allowed.
- Bill-based reimbursement of official expenses is not taxable; fixed allowances without bills are. See our tax and GST guide.
Expense claims are small one at a time and large in total. A clear policy protects employees from being out of pocket, protects the company from inflated claims, and saves finance teams hours of back-and-forth every month.
What’s inside the template
- General principles: business purpose, bills, limits as maximums, and pre-approval.
- How to claim: deadlines, one line per bill, GST invoices, no split or duplicate bills.
- Travel: approval, mode of travel by grade, hotel limits by city class and per diem.
- Local conveyance including a per-km rate for personal vehicles.
- Phone and internet, client entertainment and other expenses.
- What is not reimbursed, travel advances, an approval matrix and payment timelines.
- Tax and GST notes and how misuse is handled.
Setting limits by grade
Limits keep decisions quick: employees know what they can book without asking. The template has tables like this one, with every value highlighted for you to set.
| Grade | Air | Train | Hotel per night (metro) | Per diem |
|---|
| Staff | Economy, long trips only | 3AC | ₹3,500 | ₹800 |
| Managers | Economy | 2AC | ₹6,000 | ₹1,200 |
| Senior management | Economy; business on long flights | 1AC | Actuals, reasonable | ₹1,500 |
These amounts show the format only. Set limits from your own travel data and city mix, and review them every year.
Get the GST invoice right
When an employee books a flight, hotel or cab for work, the company can usually claim GST input tax credit, but only if the tax invoice is in the company’s name with its GSTIN. Once a flight ticket is issued without the GSTIN, it generally cannot be added later. That is why the template asks employees to give the company GSTIN at the time of booking.
Some credits are always blockedUnder Section 17(5) of the CGST Act, credit is not available on food and beverages, or on leave and home travel benefits for employees, even with a proper invoice. Hotel stays in a state where the company has no GST registration also usually do not give usable credit.
Free download
Expense Reimbursement Policy (Word)
- 4 pages, fully editable
- Every limit highlighted in yellow
- Approval matrix and deadlines included
- No sign-up needed
Download (.docx)
How to roll out your policy
1
Fill in the highlighted valuesSet grades, limits, the per-km rate, the claim deadline and the approval matrix, then delete the instructions box.
2
Have finance and your tax adviser review itEspecially the tax and GST section, which depends on how you pay each item.
3
Set it up in your expense systemConfigure categories, limits per grade and the approval chain so the rules are applied automatically.
4
Share it and train managersManagers are the first check. Explain what they should look for before approving.
How GoHRMS helps
Expense claims, from bill to bank
- Employees submit claims with bill photos from the mobile app
- Category and grade-wise limits checked automatically
- Multi-level approval workflow
- Approved claims paid with salary or as a separate payout
See Expense Claims
Frequently asked questions
What is reimbursed and what is not, limits by grade or city, how and by when to submit claims, the bills and GST invoices required, who approves which amounts, how advances are settled, and when approved claims are paid.
Most companies allow 30 days from the expense, or 15 days from the end of a trip, with a hard stop such as 90 days. Short deadlines keep the books accurate and make GST credit easier to claim in the right period.
Reimbursement of actual expenses incurred for official work, supported by bills, is generally not taxable salary, in both the old and new tax regimes. Fixed allowances paid without bills are taxable. See our expense tax and GST guide for details.
The Code on Wages allows deductions from wages to recover advances. Write the rule into your policy, tell the employee before you recover, and keep a record of the advance and its settlement.
Tags:Expense policyTravel policyReimbursementGST input creditHR template
GC
Gizmosys Compliance Team
Our team runs payroll, reimbursements and compliance for businesses across India. Want a policy tailored to your company? Talk to our HR consultants.
Sources:
GST on employee reimbursements and ITC (GSTZen) ·
GST input credit on flight tickets (HappyFares) ·
Section 17(5) blocked credits (Razorpay).
Amounts are examples to show the format. This article and template are general information, not tax or legal advice.