Direct
Tax –Salary – Perquisite
1. Rent-free House :
a. Govt. employees - Perquisite value is license
fee.
b. Non-govt. employees (if house owned by
employer) – Perquisite value is 15% (for city’s population > 25 lakh), 10%
(for city’s population between 10 to 25 lakh) and 7.5% (for city’s population
< 10 lakh)
c. Non-govt. employees (if house taken on lease
by employer) – Perquisite value is 15% or lease rent whichever is lower.
d. If furniture is also provided in house to
govt. or non-govt. employee, 10% of the cost of furniture or annual rent of
furniture (if any) paid by employer.
e. Special
Cases : (i) No tax for house in remote area, (ii) Hotel accommodation – 24% of salary or
hotel tariff whichever is lower but it is tax-free for 15 days in case of
transfer (iii) Two rent-free houses in
case of transfer – One of the house is tax-free for 90 days at the option of
employee, (iv) Rent-free house is always tax-free in cases of Union Minister,
Leader of Opposition in Parliament, official of Parliament, High Court or
Supreme Court Judge, Chairman or member in UPSC.
2. Free Domestic Servant/ Gas, electricity or
water supplied after purchasing from outside agency : Perquisite
taxable = Actual amount spent by employer minus Amount recovered.
3.
Free educational facility : (i) If provided at outside – expenses incurred by
the employer, (ii) If educational institution owned/maintained by employer – Up
to Rs. 1,000/= per child is not taxable.
4. LTC
– 2 journeys in block of 4 years is free based on actual expenditure for
shortest route
5. Interest-fee/
Concessional loan: (i) Taxable @ SBI lending rate at maximum outstanding
balance at the end of each month, (ii) Not taxable up to Rs. 20,000/= original
loan, (iii) Loan given given in rule 3A for medical treatment of employee or
his family is not taxable
6. Use
of employer’s movable asset: (i) Taxable perquisite is 10% p.a. of actual cost
of asset. (ii) Use of Computer/ laptop not taxable.
7.
Sale of movable asset : (i) Taxable perquisite = Actual cost – normal wear
& tear – Sale consideration, (ii) Normal wear & tear is 50% p.a in case of Computer/ electronic item and 20% p.a.in case of Car in both cases by
reducing installment method whereas is 10% p.a. in case of other items.
8.
Medical facility : Not taxable (i) If hospital is owned/maintained by employer,
(ii) In case of govt. hospital or private hospitals approved/ recognized by
govt. (iii) medical insurance premium paid or reimbursed by the employer, (iv)
Up to Rs.15,000/- for medical expenses incurred or reimbursed by the employer
in other cases, (v) For non-specified employees, (vi)For treatment outside India
if a few conditions are satisfied.
