Perquisites
Meaning of Perquisites :
Perquisites are the benefits or amenities provided in cash or kind by employer free of cost
or at a concessional rate. Perquisites can be divided in the following two categories:
A. Taxable Perquisites
1) The value of rent free accommodation provided by employer to the assessee.
2) The value of accommodation at concessional rent provided by employer to
employee.
3) Employee’s personal monetary obligation met by employer.
For e.g. : a) Electricity, Water and Gas bill paid by employer
b) Income Tax paid by employer
c) Professional tax paid by employer (Deduction u/s 16 will be
allowed to the employee)
d) Personal servant’s salary paid by employer
e) Municipal tax met by employer
4) Life Insurance premium paid by employer / any contribution to a fund to
provide annuity to employee. (Other than contribution to approved
superannuation fund.) (Since it is taxable, it is deductible u/s 80C or 80CCC)
5) 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.
6) the amount of any contribution, exceeding ` 1 lakh by the employer to an
approved superannuation fund of the employee.
7) Interest free or concessional loan exceeding ` 20,000.
8) Moveable Assets given to employee for use (other than motor car & computer)
9) Moveable Assets sold to employee at concessional rates.
10) Any other benefit or amenity, provided free of cost, or at a concessional rate to
a specified employee is treated as a perquisite and included in the salary of a
specified employee.
E.g. Free gas, electricity or water, provision of car, educational facilities for
children etc.
B. Non-Taxable Perquisites
1) Free medical treatment at employer’s own hospital / dispensary/
2) Medical treatment in recognized hospital / Govt. hospital / approved hospital.
3) Reimbursement of medical expenses in private hospital are exempt upto `
15,000 p.a.
4) Mediclaim Insurance Premium paid by employer. (Since it is not taxable, it is not
deductible u/s 80D)
5) Refreshment provided by an employer to all employees during working hours in
office premises.
6) Free meal provided by the employer during working/business hours or through
paid nontransferable (usable only at eating joints) vouche`(Upto ` 50 per meal)
7) Amount spent on training of employees or fees paid for refresher management
course.
8) Free telephone(s) including mobile phone(s).
9) Conveyance facility provided to an employee to cover the journey between
office and residence.
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