It is any benefit given by an employer to his employee or any member of his household free of cost or at concessional rate.
Member of household includes:
- Spouse (whether dependent or not);
- Children and their spouse (whether dependent or not);
- Parents (whether dependent or not);
- Other Dependents
Perquisites can be divided in the following 3 categories:
- Perquisites taxable in all cases
- Perquisites not taxable
- Perquisites which are taxable only in the hands of specified Employees
TAXABLE (Subject to Conditions)
- Rent Free Accommodation
- Concessional Rent House
- Obligation of employee met by Employer. Amount paid by Employer regarding :
- Supply of Gas, Electricity & Water
- Free or Concessional Education Facilities of Children
- Professional Tax on employee
- Salary of servant employed by employee
- Motor Car or any other Conveyance for personal use of Employee
- Reimbursement of Medical Expenditure
- Any other benefits given by employer to employee :
- Free meals if provided by during working hours and value exceeds Rs.50 per day. Excess is taxable.
- Gifts exceeding Rs.5,000
- Club facilities actual expenditure is taxable.
- Credit Card and add on card-actual fee is taxable
- Interest free loans or loan at concessional rate of interest if more than Rs.20,000 and if not for medical treatment-difference between prescribed rate and rate charged is taxable.
- Use of movable assets except computers and laptops.
- Transfer of movable assets.
- Expense on tours and travels.
NON TAXABLE (EXEMPTED)- PERQUISITES
- Leave Travel Allowance subject to conditions & actual spent only for travels.
Initial Fees paid for corporate membership of a club.
- Refreshment provided during working hours in office premises.
- Payment of annual premium on Personal Accident Policy.
- Subscription to periodicals and journal required for discharge of work.
- Provision of Medical Facilities.
- Gift not exceeding Rs. 5,000 p.a.
- Use of Health Club, Sports facility.
- Free telephones whether fixed or mobile phones.
- Interest free / concessional loan not exceeding Rs. 20,000 (limit not applicable for medical treatment).
- Contribution to recognized Provident Fund / approved super annuation fund, pension or deferred annuity scheme & staff group insurance scheme.
- Free meal provided to all employees in office upto Rs 50 per meal employee or provided by the employer through paid vouchers usable at eating joints.
- Allotment of shares, debentures to its employees under ESOP in accordance with Govt guidelines
- Contribution to Medical Insurance Policy by employer is exempt to tax in the hands of employees to any extent.
- Free recreational facilities.
- Amount spent for providing free educational facilities and training of the employee is not taxable in the hands of employees to any extent
PERQUISITES – TAXABLE ONLY IN THE HANDS OF SPECIFIED EMPLOYEES.
- Car owned by employer but used by employee both for personal and official purpose.
- Gas and Electricity facility.
- Education facility for children.
- Free Transport Allowance by employer engaged in Transport Business.
- Service of Domestic servant provided by employer.