If the car is used for only official purpose, it will not be taxable in the hands of employee irrespective of cubic capacity of engine. Cubic Capacity within 1. If driver is provided. Cubic Capacity exceeding 1. If driver is vided. If the car is used for only personal purpose, it will be fully taxable in the hands of employee irrespective of cubic capacity of engine.
If running and maintenance cost is reimbursed by the employer. If Employee owns any other automotive conveyance but running and maintenance is reimbursed by employer. If the car is used for only official purpose, it will not be taxable in the hands of employee if cubic capacity of engine is within 1.
This shall be determined as the amount paid by the employer to the agency supplying the same. However, any payment received from the employee towards the above would be reduced from the amount [Rule 3 4 ]. Value of perquisite would be the value at which such amenity is offered to general public as reduced by any amount, if recovered from the employee.
However, these provisions are not applicable to the employees of an airline or the railways. The value of benefit resulting from provision of any of these shall be the actual cost borne by the employer in this respect as reduced by any amount paid by the employee for such services. The value of the perquisite shall be the excess of interest payable at the prescribed interest rate over, interest, if any, actually paid by the employee or any member of his household.
The prescribed interest rate would be the rate charged by State Bank of India as on the 1st Day of the relevant Previous Year in respect of loans of the same type and for same purpose advanced by it to general public. Perquisite to be calculated on the basis of the maximum outstanding monthly balance method. However, loans upto Rs.
The perquisite value in respect of free food and non-alcoholic beverages provided by the employer, not liable to pay fringe benefit tax, to an employee shall be the expenditure incurred by the employer as reduced by the amount paid or recovered from the employee for such benefit or amenity.
However, no perquisite value will be taken if food and non-alcoholic beverages are provided during working hours and certain conditions specified under Rule 3 7 iii are satisfied. The perquisite value in respect of any gift, or voucher, or taken in lieu of which such gift may be received by the employee or member of his household from the employer, not liable to pay fringe benefit tax, shall be the sum equal to the amount of such gift, voucher or token.
However, no perquisite value will be taken if the value of such gift, voucher or taken is below Rs. The perquisite value in respect of expenses incurred by the employee or any of his household members, which are charged to a credit card provided by the employer, not liable to pay fringe benefit tax, which are paid or reimbursed by such employer to an employee shall be taken to be such amount paid or reimbursed by the employer.
However, no perquisite value will be taken if the expenses are incurred wholly and exclusively for official purposes and certain conditions mentioned in Rule 3 7 v are satisfied. The perquisite value in respect of amount paid or reimbursed to an employee by an employer, not liable to pay fringe benefit tax, against the expenses incurred in a club by such employee or any of his household members shall be taken to be such amount incurred or reimbursed by the employer as reduced by any amount paid or recovered from the employee on such account.
However, no perquisite value will be taken if the expenditure is incurred wholly any exclusively for business purposes and certain conditions mentioned in Rule 3 7 vi are satisfied. Perquisites allowed outside India by the Government to a citizen of India for rendering services outside India Sec. No perquisite shall arise in relation to expenses on telephones including a mobile phone incurred on behalf of the employee by the employer.
Allowance is defined as a fixed quantity of money or other substance given regularly in addition to salary for meeting specific requirements of the employees. As a general rule, all allowances are to be included in the total income unless specifically exempted.
Exemption in respect of following allowances is allowable to the extent mentioned against each This is subject to a maximum of the air economy fare or AC 1st Class fare if journey is performed by mode other than air by such route, provided that the exemption shall be available only in respect of two journeys performed in a block of 4 calendar years. All these exempt allowance are detailed in Rule 2BB of Income-tax Rules and are briefly given below:.
For the purpose of Section 10 14 i , following allowances are exempt, subject to actual expenses incurred:. Under Section 10 14 ii , the following allowances have been prescribed as exempt. I am a retired state govt. Hospital Bill is not taxable.
How and in which item I can claim deduction in itr1. Sir, Please give exact act for exemption allowances Like hill and remote area allowances and meet expences. Please fill out the contact form below and we will reply as soon as possible.
Your email. Which Application? When Noticed? Your question. Share More. Start a discussion Unanswered Report Abuse. Reply Follow. Rakesh Aggarwal Student 11 December Allowance are provided only in cash whereas Perquisites can be either provided in cash or in kind.
Rakesh Aggarwal Student 11 December Allowances are fixed whereas same is not the case in perquisites depends on expenditure.
The main important difference between the allowance and the perquisites is that the allowance are received by the employee in his hands and then they are spent, where as in the case of perquisites the money is not received, it is only the advantage that is received.
Similarly sales man is given a traveling allowance because it is the requirement of the job that he should travel extensively for procuring business. Arun P D 15 June It is a taxable perquisite. Any sum payable by the employer to effect an assurance on the life of the employee or to effect a contract of annuity life insurance is a taxable perquisite. Source : students journal vol 22, april edition, Special issue on Income Tax Law.
Ritik Chopra student 11 March life insurance premium paid by employer on behalf of employee is treated as taxable perquisite in the hands of the employee. Secondly, whether the car is only for official purposes or partly for personal use and partly for official use.
Automate perquisite, TDS, tax exemption, calculation and more. Check out Saral PayPack Payroll software for more details. Skip to content Perquisites in salary - Types, taxability and calculation. Hello, in this post we will discuss the perquisites in Salary. We will cover the following: What are perquisites in salary? Difference between allowance and perquisites Types of perquisites Taxability of perquisites Tax on perquisites Tax free perquisites include Calculation of perquisites or tax What are perquisites in salary?
Any amount paid by the employer in respect of an obligation that was actually payable by the assessee.
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