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Perquisies' & 'Income Tax - ( Taxable & Exempted)

 

1.4.      “PERQUISITES”  &  INCOME TAX

Perquisites may be defined as any casual emolument or benefit attached to an office or position in addition to salary or  wages. It also denotes some thing that benefits a man by going into his own pocket ; it does not, however  cover mere reimbursement of necessary disbursements.

Perquisites can be divided  in the following 3 categories :

1.  Perquisites - Taxable in all cases.
2.  Perquisites – Exempted.
3.  Perquisites -  Taxable only in the hands of specified Employees.

TAXABLE-PERQUISITES

(Subject to Conditions)
Perquisites is a gain or profit incidentally made from employment in addition to regular salary or wages. Following are few perquisites which shall be taxable.

  1. Rent Free Accommodation

  2. Concessional Rent House

  3. Obligation of employee met by Employer. Amount paid by Employer regarding :

    1. Supply of Gas, Electricity & Water

    2. Free or Concessional Education Facilities of Children

    3. Income Tax of employee

    4. Professional Tax on employee

    5. Salary of servant employed by employee

    6. Motor Car or any other Conveyance for personal use of Employee

    7. Reimbursement of Medical Expenditure

  4. Any other Fringe benefits given by employer to employee :

    1. Free meals if provided by during working hours and value exceeds Rs.50 per day. Excess is taxable.

    2. Gifts exceeding Rs.5,000

    3. Club facilities actual expenditure is taxable.

    4. Credit Card and add on card-actual fee is taxable

    5. 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.

    6. Use of movable assets except computers and laptops.

    7. Transfer of movable assets.

    8. Expense on tours and travels.

NON TAXABLE (EXEMPTED)- PERQUISITES

1)   Leave Travel Concession subject to conditions & actual spent only for travels.

2)   Computer/ Laptop provided for official / personal use.

  1. Initial Fees paid for corporate membership of a club.

  2. Refreshment provided by the Employer during working hours in
    office premises.

  3. Payment of annual premium on Personal Accident Policy.

  4. Subscription to periodicals and journal required for discharge of work.

  5. Provision of Medical Facilities.

  6. Gift not exceeding Rs. 5,000 p.a.

  7. Use of Health Club, Sports facility.

  8. Free telephones whether fixed or mobile phones.

  9. Interest Free / concessional loan of an amount not exceeding Rs.  20,000 (limit not application in the case of medical treatment)

  10. Contribution to recognized Provident Fund / approved super  annuation fund, pension or deferred annuity scheme & staff group insurance scheme.

  11. Free meal provided during working hours or through paid non transferable vouchers not exceeding Rs. 50 per meal or free meal provided during working hours in a remote area.

  12. The value of any benefit provided free or at a concessional rate (including goods sold at concessional rate) by a company to the Employees by way of allotment of shares etc., under the Employees stock  option plan as per Central Government Guidelines.

  13. Free Medical Facilities as given u/s 17(2)

  14. Free recreational facilities.

  15. Free education , training or refresher course for employees.

  16. Free ration received by member of armed force.

  17. Perquisites allowed by Govt. by its employees posted abroad.

  18. Rent free house given to office of Parliament, a Union Minister, and leader of Opposition in Parliament.

  19. Free Residence and Conveyance facilities to Judges of Supreme Court and High Court.

  20. Free Conveyance provided by employer to employee for going to or coming from palace of employment.

  21. Employers contribution to staff group insurance scheme.

  22. Tax on Perks paid by employer.

PERQUISITES -  TAXABLE ONLY IN THE HANDS OF SPECIFIED EMPLOYEES.

  1. Car owned by employer but used by employee both for personal and official purpose.

  2. Gas and Electricity facility.

  3. Education facility for children.

  4. Free Transport Allowance by employer engaged in Transport Business.

  5. Service of Domestic servant provided by employer.

 
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Every person,— (a) being a company or a firm; (whether having income or loss) or (b) being a person other than a company or a firm if his total income or the total ncome of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall file a return of his income in the prescribed form.
 
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We have heard many a times that every individual whose total income exceeds the maximum exemption limit is obligated to furnish his/her Income Tax Return or ITR.
 
Section-139(9): Defective Tax Return
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Section 139(5) : Revised Income Tax Return
If any person, having furnished a return u/s 139(1), or in pursuance of a notice issued under section 142(1), discovers any omission or any wrong statement therein, he may furnish a revised return at any time.
 
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Every person in receipt of income derived from property held under trust or other legal obligation wholly or partly for charitable or religious purposes or of income being voluntary contributions referred to in section 2(24)(iia) shall.
 
Section-139(4) : Belated Income Tax Return
If an assessee has not furnished a return of his income within the time allowed to him under section 139(1) or within the time allowed under a notice issued under section 142(1).
 
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