Meaning of Specified Employee for Taxable Perquisites [Section 17(2)(iii)]. An employee is said to be a specified employee in any of the following cases :
If he is director of the company; or
he has substantial interest in the affairs of the company i.e., he holds at least 20% of the voting power (equity shares) in the company; or
his monetary annual salary income is more than ` 50,000 p.a.
Salary for this purpose means all what he gets in cash from one employer or more than one employer if he works for more than one employer simultaneously whether full time or part time, and is taxable under the head Salary. The total of these items is to be treated as gross salary out of which deductions u/s 16(u) and (iii) are to be allowed.
Monetary Salary includes :
1. Basic Salary.
2. D.A. / D.P. / A.D.A.
3. Bonus, Commission, Fees and all taxable allowances or taxable portion of an allowance.
4. Any perquisites received in cash or in monetary form.
5. Gratuity, Pension, Leave Salary but arrears of salary and salary received in advance is to be excluded.
6. In case employee is working simultaneously with more than one employer, salary from all the employers is to be included.
7. Monetary annual salary income ` 50,000 shall be calculated after allowing deductions u/s 16(u) and 16(iii).