BLOG on Income Tax Management for - AY 2022-23 & 2023-24

Perquisites Exempted from Tax for all Employees and Not Added in Salary Income

Medical facility:

The value of any medical treatment provided to an employee or any member of his family in a hospital, dispensary or a nursing home maintained by the employer shall be a tax free perquisite.

Medical reimbursement:

Any sum paid by the employer in respect of any expenditure incurred by the employee on his medical treatment or treatment of any member of his family subject to maximum of ₹15,000 in the previous year .

Recreational facilities:

Any recreational facility provided to a group of employees (not being restricted to a select few employees) by the employer is not taxable.

Training of employees:

Any expenditure incurred by the employer, for providing training to the employees or by way of payment of fees of refresher courses attended by the employees.

Use of health club, sports and similar facilities provided uniformly to all employees by the employer.
Expenses on telephone, including a mobile phone, actually incurred on behalf of the employee by the employer.
Employer's contribution: Employer's contribution to superannuation fund of the employee or provided such contribution does not exceed ₹1,50,000 per employee per year.
The premium paid by the employer on an accident policy taken out by it in respect of the employee would not be a perquisite.
Amount given by employer of assessee to assessee's child as scholarship is exempt under section 10(16).
Food and beverages provided to employees:

The following shall be a tax free perquisite in the hands of the employees—

free food and non-alcoholic beverages provided by the employer to his employees during working hours:
1. at office or business premises or
2. through paid vouchers which are not transferable and usable only at eating joints. Provided the value of such meal is upto ₹50 per meal.
Any tea or snacks provided during working hours.
Free food and non-alcoholic beverages during working hours provided in a remote area or on offshore installation.

Loans to employees:

In the following cases the value of benefit to the assessee resulting from the provision of interest free or concessional loan shall be nil:
1. where the amount of loans are petty, not exceeding in the aggregate ₹20,000;
2. loans made available for medical treatment in respect of diseases specified in rule 3A of the Income-tax Rules. However, the exemption so provided shall not apply to so much of the loan as has been reimbursed to the employee under any medical insurance scheme.
Perquisites provided outside India:

Perquisites provided by the Government to its employees, who are citizens of India for rendering services outside India, are not taxable. [Section 10(7)]
Rent free House/Conveyance facility:

Rent free official residence and conveyance facilities provided to a Judge of the Supreme Court/High Court is not a taxable perquisite.
Residence to officials of Parliament, etc.:
Rent free furnished residence (including maintenance thereof) provided to an officer of the Parliament, a Union Minister or Leader of Opposition in Parliament, is not a taxable perquisite.
Accommodation in a remote area:

The accommodation provided by the employer shall be a tax free perquisite if the accommodation is provided to an employee working at mining site or an onshore oil exploration site or a project execution site, or a dam site or a power generation site or an offshore site which—
1. being of a temporary nature and having plinth area not exceeding 800 square feet, is located not less than eight kilometres away from the local limits of any municipality or a cantonment board; or
2. is located in a remote area.
Educational facility for children of the employee:

Where the educational institution itself is maintained and owned by the employer and free educational facilities are provided to the children of the employee or where such free educational facilities are provided in any institution by reason of his being in employment of that employer, there shall be no perquisite value if the cost of such education or the value of such benefit per child does not exceed ₹1,000 p.m.

Use by the employee or any member of his household of laptops and computers belonging to the employer or hired by him.
Leave Travel Concession
Tax paid by the employer on non-monetary perquisites:

Tax paid by the employer on nonmonetary perquisites of the employee shall be exempt in the hands of the employee. [Section 10(10CC)]