A follower asked me this question: “Aunty, if my company sponsors my MBA, is it taxable?”
Such a good question but I didn’t have the answer.
Luckily, my friend Poovarni Rajagopal, a licensed tax agent, does.
“If a company reimburses an employee for their master’s degree fees, it is generally considered a taxable benefit to the employee. However, there are exceptions.
If the reimbursement is made under an education refund plan, for example where the employee is reimbursed only after successfully completing a part-time course, it is not treated as taxable.
There are also double deduction incentives available to companies for sponsoring scholarships up to master’s level, but these apply only if specific conditions are met and do not usually cover normal employee reimbursements.
In summary, unless the arrangement qualifies as a scholarship or an education refund plan, the reimbursement will be taxable to the employee.”
There you go! I’ve learned something new today, and I’m very happy!
If you are looking for professional tax advisory and structuring support, you can reach Poovarni and her team at admin@invatax.com or visit their website: https://invatax.com
xoxoxo, AuntyHR
