U/s 17(1) 'Salary' includes the value of any
perquisite allowed or amenity provided by
employer to employee.. Perquisite simply
means any casual emolument attached to
an office. Dictionary defines perquisite as
"any casual emolument, fee or profit
attached to an office or position, in addition
to salary or wages".
(i) The value of rent-free accommodation provided to the assessee
by his employer [Sec. 17(2)(i)] :
(ii) The value of any concession in the matter of rent respecting
any accommodation provided to the assessee by his employer [Sec.
17(2) (ii)]:
(iii) The value of any benefit or amenity granted or provided
free of cost or at concessional rate in any case [Sec. 17(2)(iii)] :
(iv) Any sum paid by the employee in respect of any obligation
which, but for such payment would have been payable by the
employee [Sec. 17(2)(iv)] :
(v) Any sum payable by the employer, whether directly through a
fund, other than a recognized provident fund [Sec. (2)(v)] :
(vi) The value of any specified security or sweat equity shares
allotted or transferred directly or indirectly, by the employer or
former employer, free of cost or at concessional rate to the
assessee [Sec. 17(2)(vi)] :
(vii) The amount of any contribution to an approved
superannuation fund by the employer in respect of the assessee,
to the extent it exceeds Rs. 1,00,000; and [Section 17(2)(vii)]
(viii) The value of any other fringe benefit or amenity as may be
prescribed. [Sec. 17(2)(viii)] provided that nothing in his clause
shall apply to:
1 .the value of any medical treatment provided to an employ or
any other member of his family
2. Any sum paid by the employer in respect of any expenditure
actually incurred by the employee on his medical treatment or of
any member of his family
3. Any portion of the premium paid by an employer in relation to
an employee
4. Any sum paid by an employer in respect of any premium paid
by an employee
5 .any sum paid by an employer in respect of any expenditure
actually incurred by an employee
Etc
Value of following benefits is not added in salary
income :
A-1. Free medical facilities or reimbursement of
medical expenditure : Exemption under this section
shall be allowed for treatment of self, wife, dependent
children, dependent parents and dependent brothers
and sisters.
A-2. Free refreshment supplied by employer to its
employees during office hours in office premises except
free meals is Fully exempted.
A-3. Free meals given at remote area or offshore
installation shall be Fully exempted.
A-4.
Free recreational facilities provided by employer
to its employees is Fully exempted.
A-5. Provision of telephones including mobile
phones given by the employer to employee to facilitate
the business of the employer is Fully exempted.
A-6. Free education which is provided by employer
from its own resources who is engaged in such business
provided value of such benefit does not exceed Rs. 1,000
p.m. per child is Fully exempted.
A-7. Cost of refresher course attended by employee
met by employer. In case employer meets expenditure of
higher education or training whether in India or abroad is
Fully exempted.
A-8. Any rent-free residential accommodation to
Judges of High Court or Supreme Court is Fully
exempted.
A-9. Goods sold by an employer to his employees at
concessional rate. The amount of concession given is
Fully exempted.
A-10. Free ration received by members of armed forces
is Fully exempted.
A-11. Perquisites allowed by Govt. to its employees
posted abroad is Fully exempted.
A-12. Rent free house given to an officer of Parliament,
a Union Minister and leader of opposition in Parliament
is Fully exempted.
A-13. Conveyance facilities to Judges of Supreme Court
and High court is Fully exempted.
A-14. Free conveyance provided by employer to
employees for going to or coming from place of
employment is Fully exempted.
A-15. Any amount contributed by employer towards
pension or deferred annuity scheme is Fully exempted.
A-16. Employer's contribution to staff group insurance
scheme is Fully exempted.
A-17. Computers, laptops given to [no transferred] an
employee for official/personal use is Fully exempted.
A-18. Transfer of a moveable asset [computer, car or
electronic items] without consideration to an employee
after such asset has been used by the employer for more
than 10 years is Fully exempted.
A-19. Accident insurance premium paid by employer for
his own benefit. In such case premium is paid for an
insurance whose benefit is to accrue to the employee, it will
be taxable is Fully exempted.
A-20. Interest free loan
(a) In case total amount of all loans taken by an
employee from his employer does not exceed Rs. 20,000 is
Fully exempted.
(b) In case loan is taken for any other purpose and rate of
interest is equal to or higher than the rate prescribed by SBI
on 1-4-2013 is Fully exempted.
A-21. Income tax on perquisites if paid by employer is Fully
exempted.
A-22. Any unauthorized use of a benefit is Fully
exempted.
B-1 RENT FREE HOUSE [Section 17(2)(i) Rule 3(1) as
amended by notification no. 94/2009 dated 18-122009]
Before calculating the value of rent free house,
following information is collected:
1. Nature of Employment
2. place where rent free house is provided
3. Meaning of accommodation
4. Nature of accommodation
5. Meaning of salary
B-2 In case accommodations is provided as
concessional accommodation [Section 17(2)(i) Rule
3(1) as amended by notification no. 94/2009 dated 1812-2009]
Accommodation AT CONCESSIONAL RENT MEANS
that employer has given a house to his employees for
which he is charging a part of the rent and thus
employee is enjoying a perquisite.
B-3 Obligation of employee met by employer
[Section 17(2)(iv)]
In case of any of the following payments are made by
employer these are fully taxable these are:(a) Gas & Electricity bills
(b) Education of Children Bills
( c) Income tax Professional tax
( d) salary of domestic servants
B-4. Sum payable by the Employer directly or through a
fund to effect an assurance/an annuity [Section
17(2)(v)]
Any sum payable by the employer for employees shall
be treated as perk to employee if:
(a) The amount is payable by the employer to effect the
assurance on the life of the assessee or
(b) The amount is payable by the employer to effect a
contract for annuity for employee
B-5 Any specified security or sweat equity shares
allotted or transferred to employee [Section
17(2)(vi)]
The value of any specified security or sweat equity
shares allotted or transferred by the employer or
former employer of the employee either free of cost or
at concessional rate shall be treated as perk to
employee. Such transfer to employee may be direct or
indirect.
B-6 Contribution to an approved superannuation
fund by the employer [Section 17(2)(vii)]
The amount of any contribution made by an
employer to an approved superannuation fund in
respect of the employee shall also be taxable as perk
to the employee to the extent it exceeds Rs 1,00,000
B-7 Value of any other prescribed fringe benefits or
amenities [Section 17(2)(vii)]
The followings benefits or amenities have been prescribed:B-7-1 Interest free or concessional loan from employer
B-7-2 Valuation of perk in respect of Travelling, Touring ,
Accommodation
B-7-3 Food & Beverages Facility
B-7-4 Valuation of Perquisite in respect of gift voucher or
Token
B-7-5 Valuation of Perquisite in respect of Credit Card
B-7-6 Valuation of Perquisite in respect of Club Facility
B-7-7 Use of moveable assets
B-7-8 Transfer of Moveable assets to the Employee
Meaning of specified employee
A) if he is director of the company or
B) he has substantial in interest in the affairs of the company i.e.
He hold at least 20 per of the voting power (equity shares) in
the company
C) his monetary annual salary income is more than Rs. 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 the head salary
C-1 Valuation of perquisite of motor Car on any
Automotive Conveyance (RULE 3(2)
In case of employer had provided a car or any other vehicle for the
private use of the employee or any other member of his family it is a
perquisite which is taxable in the hands of the employee
provided he? she is a employee of a specified category .
The valuation of Perk shall be made as under :
1 . Motor car is owned or hired by employer and its running and
maintenance expenses are met or reimbursed by employer.
a) car is fully used in the performance of official duties of the
employee
b) car is fully used for personal a private or family purpose of the
employee
c) Car is used partly in the performance of duties and partly for
private or personal purposes
2 .Car is owned by employee but its running and
maintenance expenses are met or reimbursed by employer.
3. where the employee owns any other automotive
conveyance but the actual running and maintenance
expensive are met or reimbursed by employer.
C-2 Perquisite of Free domestic servants
In case employer has provided the free service of a sweeper, a
watchman or a personal attendant ,taxable value of his type of
perquisite shall be the actual cost to the employer i.e. salary etc
value of perk { amount spent by employer} - {amount charged by
employer from employee}
C-3 Perquisite in respect of free gas electricity
energy water supply rule 3(4)
In case employer has purchased gas electric energy or water
supply from outside agency the taxable value of perk shall be
equal to the amount paid by employer to outside agency .
value of perk= (amount spend by employer)-(amount charged by
employer}
C-4 Free educational facilities to children of
employee household
1: Payment or reimbursement of fess of School
College: in case school or college fees of family member of
employee is aid by employer directly to school or college or
fee paid by the employee is reimbursed by employer it is a
taxable perquisite whether employee is specified or non
specified.
2: Educational facilities in school or college
maintained by employer
In case school etc is run by employer and free educational facilities given to
children of employee the perk is calculated:
a)free educational facilities to employees own children
b)free education facilities to any member of employee household
c.5 FACALITY OF FREE CONSESSIONAL PRIVATE
JOURNEY TO ANA EMPLOYEE BY THE EMPLOYER
ENGAGGED IN THE CARRIAGE OF PASSENGERS OR
GOODSCRULE 3(6)
value of perk= {normal freight or fare - {amount charged
chargeable from public } recovered from
e
employee}