"Other Fringe Benefits To The Employee by the Employer"


-        The value of free meals provided to any employee by the employer would be the amount of expenditure incurred by the employer. However, this would not apply to free meals upto Rs. 50 per meal provided by the employer during office hours at office or business premises or through un-transferable paid vouchers and usable only at eating joints. There is no upper limit for this. The value of any gift, or voucher during the previous year will also not be considered as a perquisite upto Rs. 5,000.

-        There would be “nil” perquisite value for expenses incurred by the employer on club expenses and credit cards for business use.

-        Free or concessional housing loan, use of movable asset such as furniture and transfer of movable asset have, however, been retained for valuation of perquisite of the employee in Finance Act, 2005. The use of telephones and mobiles, on the other hand, continue to be exempted from the purview of being taxed as a perquisite.

-        The value of benefit to the employee from the use of any movable asset other than laptops and computers would normally be determined at 10%  per annum on actual cost of such asset or the rent payable by the employer.

-        The value of benefit to the employee from the transfer of any movable asset would be equal to the actual cost of such assets to the employer as reduced by its normal wear and tear calculated at 10% of such cost for each completed year during which it was used by the employer. However, the rate of wear and tear for motor cars would be 20% and on computer and electronic items 50% by the reducing balance method, as per rule 3(7)(viii).

  1. The value of any other benefit or amenity or privilege provided by the employer would be determined on the basis of cost to the employer under an arm’s length transaction (excluding expenses on telephone incurred by the employer). Hence, before accepting any perquisite the employee must consider the tax impact.

Form No. 1 2BA containing the details of all the aforesaid taxable perquisites has to be issued to all employees to whom salary in excess of 1,50,000 p.a. is being paid.

It also contains a declaration by the employer about the value of perquisites and the taxable perquisites, etc.
Special Compensatory Allowances Exempted From Tax Upto some Limit
Conveyance And Transport Allowances Are fully Exempted From Tax
Allowances for A Helper,Uniform, Academic Research are Tax-Exempt
Free Medical Facilities Not A Perquisite in Certain Circumstances
Exemption Of LTA Or LTC (Leave Travel Assistance Or Concession)
Excess Contribution By Employer To a Employees RPF A/c is Taxable
No Benefit For Free Gas, Free Watchman And Gardener From Employer
Sweeper,Gardener,Watchman,Personal Attendant Benefit To Employee
Gas And Electric Energy Or Water Benefit To The Employee
Free Or Concessional Education Facilities Benefit To The Employee
Tax Planning For Rent-Free Residential Accommodation
Personal Or Private Journey Free Of Cost Benefit To The Employee
Interest-Free Loan Benefit To The Employee
Holiday Travelling, Touring, Etc. Benefit To The Employee
Other Fringe Benefits To The Employee by Employer
Employer Can Pay Tax On Perquisites On Behalf Of The Employees
Employees Stock Options by Employer
Exemption Of House Rent Allowance Through Proper Tax Planning
How An Employee Can Get Tax-Free Car For Personal Use
Perquisite Valuation Of Car For Office And Personal Use
Deduction For House Rent U/S 80GG
How Company Directors Can Save Money By Proper Tax Planning
Travelling And Daily Allowances fully Exempted From Income Tax
Children’s Educational And Hostel Allowances Exempt From Tax ..
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