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Taxable & Non-Taxable Perquisites under 'Salary Income'

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 something 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 not taxable

  3. Perquisites which are taxable only in the hands of specified Employees.

TAXABLE (Subject to Conditions)

Following are few perquisites which shall be taxable.

1) Rent Free Accommodation.

2) Provision of Motor Car or any other Conveyance for perstnal use.

3) Provision of Free or Concessional Education Facilities.

4) Reimbursement of Medical Expenditure.

5) Expenditure on Foreign travel and stay during medical expenditure.

6) Supply of Gas, Electricity & Water.

NON TAXABLE

  • Leave travel concession subject to conditions & only actual amount spent.

  • Comp / Laptop for official/personal use.


  • Initial fees paid for corporate membership of a

  • Refreshment provided during working hours in office premises.

  • Payment of annual premium on personal accident policy.

  • Subscription to periodicals and journals required for discharge of work.

  • Provision of Medical Facilities.

  • Gift not exceeding Rs. 5000 p.a.

  • Use of health club, sports facility.

  • Free telephones: fixed or mobiles.

  • Interest free / concessional loan not exceeding Rs. 20,000 (limit not applicable for medical treatment).

  • Children Education Allowance (Rs.1 00 p.m. per child — max. 2 children) &

  • Hostel Allowance (Rs. 300 p.m. per child — max. 2 children) is exempt.

  • Transport Allowance: Rs. 800 p.m.— Rs.1,600 p.m. (If handicapped)

  • Fixed Medical Allowance is taxable in the hands of employees however, Medical Faciliües in a private clinic is exempt to the extent of Rs. 15,000 and in government hospitals to any extent.

  • Contribution to Medical Insurance Policy by employer is exempt to tax in th hands of employees to any extent.

  • Amount spent for providing free educaonal facilies and training of the employee is not taxable in the hands of employees to any extent

  • Gift to employees of Movable Assets (other than computer/laptop, electronic items and car) after using for 10 yrs.

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

  • 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.

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