Perquisites may be defined as any casual endowment or benefit attached to an office or position in addition to salary and wages. It also donates something that benefits may be going into own pocket.
However perquisites are taxable under the head salaries’ only of these are:
i) Allowed by an employer to his employee.
ii) During the continuous of employment.
iii) Directly depend upon service.
iv) Resulting in the nature of personal advantage to the employee, and
v) Derived by virtue of employer’s authority.
‘Perquisites’ is defined in the Act:
Under the Act, the term ‘perquisites’ is defined by sec-17(2) as including the following items:
a) The value of rent free accommodation, provided to the, assessee by the employer. [sec-17(2)(i)]
b) The value of any concession in the matter of rent respecting any accommodation provided to the assessee by his employer. [Sec-17(2)(ii)]
c) The value of any benefit or amenity granted or provided free of cost or at concessional rate in any one of the following cases.[Sec-17(2)(iii)]
i) By an company to an employee who is the director there of.
ii) By an company to an employee being a person who has substantial interest in the company holding 20% of capital.
iii) By the employer to an employee to whom above two provisions do not apply and whose monetary income under head ‘salaries’ exclusive of the value of benefits or amenities not provided for way of monetary benefits excess Rs. 50,000 p.a.
d) Any sum paid by the employer in respect of any obligation which but for such payment would have been payable by the assessee. [Sec-17(2)(iv)]
e) Any sum payable by the employer, whether directly or through a fund other than RPF or super annuations fund a deposit linked insurance fund to affect an assurance in the life of the assessee or to effect to a contract of annuity. [Sec-17(2)(v)]
f) The value of any specified security or sweat equity shares allotted or transfers directly or indirectly by the employer at free of cost or at concessional rate provided to the assessee. [17(2)(vi)]
g) The amount of any contribution to an approved super annuation fund by the employer in respect of the assessee, to the extent if it exceeds Rs. 1,00,000/-. [Sec-17(2)(vii)]
h) The value of any other fringe benefits or amenities as may be prescribed. [Sec-17(2)(viii)]
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