According to (Sec 17 (2)) 'perquisite' includes the following:
- The value of rent-free accommodation provided to the assessee by
his employer;
- The value of any concession in the matter of rent with respect to
any accommodation provided to the assessee by his employer;
- The value of any benefit or amenity granted or provided free of
cost or at concessional rate in any of the following cases:
- Any benefit given by a company to an employee, who is a director
thereof;
- Any benefit given by a company to an employee, being a person who
has a substantial interest in the company;
- Any benefit given by any employer (including a company) to an
employee to whom the provisions of paragraphs (a) and (b) of this
sub-clause do not apply and whose income under the head "Salaries"
(whether due from, or paid or allowed by, one or more employer/s),
exclusive of the value of all benefits or amenities, not provided
for by way of monetary payment, exceeds Rs 50,000. However, nothing
in this sub-clause shall apply to the value of any benefit provided
by a company free of cost or at a concessional rate to its employees
by way of allotment of shares, debentures or warrants, directly or
indirectly under any Employees' Stock Option Plan or Scheme of the
company offered to such employees in accordance with the guidelines,
issued in this behalf by the Central Government. The use of any
vehicle, provided by a company or an employer for journey by the
assessee from his residence to his office or other place of work, or
from such office or place to his residence, shall not be regarded as
a benefit or amenity granted or provided to him free of cost or at
concessional rate for the purposes of this sub-clause.
- Any sum, paid by the employer in respect of any obligation which,
but for such payment, would have been payable by the assessee;
- Any sum, payable by the employer, whether directly or through a
fund, other than a recognised provident fund or an approved
superannuation fund or a Deposit-linked Insurance Fund, established
under section 3G of the Coal Mines Provident Fund and Miscellaneous
Provisions Act, 1948 (46 of 1948), or, as the case may be, section
6C of the Employees' Provident Funds and Miscellaneous Provisions
Act, 1952 (19 of 1952)], to effect an assurance on the life of the
assessee or to effect a contract for an annuity; and
- The value of any other fringe benefit or amenity as may be
prescribed.
Nothing in this clause shall apply to the following:
- The value of any medical treatment provided to an employee or any
member of his family in any hospital maintained by the employer;
- Any sum, paid by the employer in respect of any expenditure,
actually incurred by the employee on his medical treatment or
treatment of any member of his family-(a) In any hospital,
maintained by the Government or any local authority or any other
hospital approved by the Government for the purposes of medical
treatment of its employees; (b) In respect of the prescribed
diseases or ailments, in any hospital approved by the Chief
Commissioner, having regard to the prescribed guidelines. In such a
case, the employee shall attach, with his return of income, a
certificate from the hospit al specifying the disease or ailment for
which medical treatment was required and the receipt for the amount
paid to the hospital.
- Any portion of the premium, paid by an employer in relation to an
employee, to effect or to keep in force an insurance on the health
of such employee under any scheme approved by the Central Government
for the purposes of clause (ib) of sub-section (1) of section 36;
- Any sum, paid by the employer in respect of any premium paid by
the employee to effect or to keep in force an insurance on his
health or the health of any member of his family under any scheme,
approved by the Central Government for the purposes of section 80D;
- Any sum paid by the employer in respect of any expenditure
actually incurred by the employee on his medical treatment or
treatment of any member of his family other than the treatment
referred to in clauses (i) and (ii); so, however, that such sum does
not exceed Rs 15,000 in the previous year;
- Any expenditure incurred by the employer on the following:
- Medicl treatment of the employee, or any member of the family of
such employee, outside India;
- Travel and stay abroad of the employee or any member of the
family of such employee for medical treatment;
- Travel and stay abroad of one attendant who accompanies the
patient in connection with such treatment, subject to the following
conditions:
- The expenditure on medical treatment and stay abroad shall be ex
cluded from perquisite only to the extent permitted by the Reserve
Bank of India; and
- The expenditure on travel shall be excluded from perquisite only
in the case of an employee whose gross total income, as computed
before including therein the said expenditure, does not exceed two
lakh rupees;
- Any sum, paid by the employer in respect of any expenditure
actually incurred by the employee for any of the purposes specified
in clause (vi) subject to the conditions specified in or under that
clause:
For the assessment year beginning on the 1st day of April, 2002,
nothing contained in this clause shall apply to any employee whose
income under the head "Salaries" (whether due from, or paid or
allowed by, one or more employers) exclusive of the value of all
perquisites, not provided for by way of monetary payment, does not
exceed Rs 1,00,000.
Explanation
For the purposes of clause (2),
i. 'Hospital' includes a dispensary or a clinic or a nursing home;
ii. 'Family', in relation to an individual, shall have the same meaning
as in clause (5) of section 10; and
'Gross total income' shall have the same meaning as in clause (5) of
section 80B;
How are perquisites valued?
For the purpose of computing the income chargeable under the head
'Salaries,' the value of perquisites provided by the employer directly
or indirectly to the assessee (hereinafter referred to as employee) or
to any member of his household by reason of his employment shall be
determined in accordance with Rules 3 of the Income Tax Act.
What is the perquisite value of furnished Accommodation?
In the case of furnished accommodation, first the value of the
un-furnished accommodation is worked out and to that 10% per annum of
the original cost of the furniture is added. If the furniture is not
owned by the employer, the actual hire charge that is payable (whether
paid or not) is added.
How is the perquisite value of a motorcar, provided to
the employee by an employer, computed?
Value of Perquisite per calendar month
| Sl.
No. |
Circumstances |
Where cubic
capacity of engine does not exceed 1.6 litres |
Where cubic
capacity of engine exceeds 1.6 litres |
| 1. |
Where the motor car
is owned or hired by the employer and-
- a. is used wholly and
exclusively in the performance of his official duties.
- Is used exclusively for the
private or personal purposes of the employee or any member of
his house-hold and the running and maintenance expenses are met
or reimbursed by the employer.
- Is used partly in the
performance of duties and partly for private or personal
purposes of his own or any member of his household and
- The expenses on maintenance
and running are met or reimbursed by the employer.
- The expenses on running and
maintenance for such private or personal use are fully met
by the assessee.
|
No value provided
that the documents specified in clause (B) of this sub-rule are
maintained by the employer.
Actual amount of expenditure incurred by the employer on the
running and maintenance of motor car during the relevant previous
year including remuneration, if any paid by the employee or any
member of his house-hold and the running and maintenance expenses
are met or reimbursed by the employer.
Rs. 1,200 (plus Rs. 600, if chauffeur is also provided to run the
motor car)
Rs. 400 (plus Rs. 600, if chauffeur is provided by the employer to
run the motor car) |
No value provided
that the documents specified in clause (B) of this sub-rule are
maintained by the employer.
Actual amount of expenditure incurred by the employer on the
running and maintenance of motor car during the relevant previous
year including remuneration, if any, paid by the employer to the
chauffeur as increased by the amount representing normal wear and
tear of the motor car and as reduced by any amount charged from the
employee for such use.
Rs. 1,600 (plus Rs. 600, if chauffeur is also provided to run the
motor car)
Rs. 600 (plus Rs.600, if chauffeur is also provided to run the
motor car) |
| 2. |
Where the employee
owns a motor car but the actual running and maintenance charges
(including remuneration of the chauffeur, if any) are met or
reimbursed to him by the employer and
- such reimbursement is for the
use of the vehicle wholly and exclusively for official purposes.
- such reimbursement is for the
use of the vehicle partly for official purposes and partly for
personal or private purposes of the employee or any member of
his household.
|
No value provided
that the documents specified in clause (B) of this sub-rule are
maintained by the employer.
Subject to the provisions contained in clause (B) of this sub-rule,
the actual amount of expenditure incurred by the employer as reduced
by the amount specified in col.(1)(c)(i) above. |
No value provided
that the documents specified in clause (B) of this sub-rule are
maintained by the employer.
Subject to the provisions contained in clause (B) of this sub-rule,
the actual amount of expenditure incurred by the employer as reduced
by the amount specified in col. (1)(c)(i) above. |
| 3. |
Where the employee
owns any other automotive conveyance but the actual running and
maintenance charges are met or reimbursed to him by the employer and
- such reimbursement is for the
use of the vehicle wholly and exclusively for official purposes.
- Such reimbursement is for the
use of the vehicle partly for official purposes and partly for
personal or private purposes of the employee.
|
No value provided
that the documents specified in clause (B) of this sub-rule are
maintained by the employer.
Subject to the provisions contained in clause (B)of this sub-rule,
the actual amount of expenditure incurred by the employer as reduced
by an amount of Rs.600: |
No applicable |
Provided that where one or more motor-cars are owned or hired by the
employer and the employee or any member of his household are allowed the
use of such motor-car or all or any such motor-cars (otherwise than
wholly and exclusively in the performance of his duties), the value of
perquisite shall be the amount calculated in respect of one car in
accordance with item (1)(c)(i) of the Table II as if the employee had
been provided one motor-car for use partly in the performance of his
duties and partly for his private or personal purposes and the amount
calculated in respect of the other car or cars in accordance with item
(1)(b) of the Table II as if he had been provided with such car or cars
exclusively for his private or personal purposes.
(B) Where the employer or the employee claims that the motor-car is
used wholly and exclusively in the performance of official duty or that
the actual expenses on the running and maintenance of the motor-car
owned by the employee for official purposes is more than the amounts
deductible in item 2(ii) or 3(ii) of the above Table, he may claim a
higher amount attributable to such official use and the value of
perquisite in such a case shall be the actual amount of charges met or
reimbursed by the employer as reduced by such higher amount attributable
to official use of the vehicle provided that the following conditions
are fulfilled.
- the employer has maintained complete details of the journey
undertaken for official purpose, which may include date of journey,
destination, mileage, and the amount of expenditure incurred
thereon;
- the employee gives a certificate that the expenditure was
incurred wholly and exclusively for the performance of his official
duty;
- the supervising authority of the employee, wherever applicable,
gives a certificate to the effect that the expenditure was incurred
wholly and exclusively for the performance of official duties.
Explanation: For the purposes of this sub-rule, the normal
wear and tear of a motorcar shall be taken at 10% per annum of the
actual cost of the motor-car or cars.
Is the facility of a car, provided by the employer for
use between the residence and office, a perquisite?
The use of a vehicle of an employer for the journey from his residence
to his office or, from any other place of work to his residence will not
be taxable as perquisite provided the following conditions are
satisfied:
(i) The employer has maintained complete details of the journey
undertaken for official purpose, which may include date of journey,
destination, mileage, and the amount of expenditure incurred thereon;
(ii) The employee gives a certificate that the expenditure was incurred
wholly and exclusively for the performance of his official duty;
(iii) The supervising authority of the employee, wherever applicable,
gives a certificate to the effect that the expenditure was incurred
wholly and exclusively for the performance of official duties.
What is the perquisite value of gas, electricity or water
supply, provided free of cost to the employee?
The value of benefit to the employee or any member of his household,
resulting from the supply of gas, electric energy or water for his
household consumption shall be determined as the sum equal to the amount
paid on that account by the employer to the agency supplying the gas,
electric energy or water. Where such supply is made from resources,
owned by the employer, without purchasing them from any other outside
agency, the value of perquisite would be the manufacturing cost per unit
incurred by the employer. Where the employee is paying any amount in
respect of such services, the amount so paid shall be deducted from the
value so arrived at.
Can the reimbursement of actual expenses be treated as a
perquisite?
No. Reimbursement of actual expenses cannot be treated as a perquisite.
What is the perquisite value of rent-free unfurnished
accommodation that is provided by an employer to an employee?
Rule 3: The value of the residential accommodation, provided by the
employer during the previous year, shall be determined as below.
- Where the accommodation is provided by Union or State Government
to their employees, either holding office or post in connection with
the affairs of Union or State or, serving with any body or
undertaking under the control of such Government on deputation:
Licence fee, as determined by Union or State Government in
accordance with the rules framed by that Government as reduced by
the rent, actually paid by the employee. It is to be noted that the
value of the rent-free official residence, provided to officers of
Parliament, Union Ministers and the leader of the Opposition Party
in Parliament, is also exempt from tax.
- Where the accommodation is provided by any other employer and
- Where the accommodation is owned by the employer: 10% of salary
in cities having population exceeding 4 lakhs as per 1991 census;
- Where the accommodation is taken on lease or rent by the
employer: 7.5 % of salary in other cities, in respect of the period
during which the said accommodation was occupied by the employee
during the previous year as reduced by the rent, if any, actually
paid by the employee. Actual amount to lease rental, paid or payable
by the employer or 10% of salary whichever is lower as reduced by
the rent, if any, actually paid by the employee.
