Perks

Types of perks

1. Perquisites Dr. P. Ravichandran M.Com ., M.B.A., M.A (Astrology)., M.Phil., Ph.D., D.C.P., D.L.L & A.L., P.G.D.C.A., P.G.D.P.M & I.R ., S.B.K. College, Aruppukottai – 626101.  9443424090 & 9080030090  e-mail id.- [email protected]

2. PERQUISITES (Personal advantages) Perquisites are benefits attached in addition to normal salary to which an employee has right by way of his employment. Perquisites may be provided in cash or in kind. Perquisites are included in salary only if they are received by an employee from his employer ( may be former, present or prospective.) Perquisites received from a person other than employer, are taxable under the head “PGBP” or “IFOS”.

3. PERQUISITES contd …. A benefit (or) advantage would be taxable as perquisites only if it has legal origin. As unauthorised advantage taken by an employee, without employer’s authority would create a legal obligation to restore such advantage, it would not amount to perquisite taxable under the Act.

4. TYPES OF PERKS Taxable in specified cases Exempted Perks (Tax-free perks) Taxable Perks

5. EXEMPTED FROM TAX Tax-free perks Free medical facilities or reimbursement of medical expenditure; Free refreshment supplied at work place; Free meals given at remote area or offshore; Free recreational facilities; Provision for telephone including mobile phones; Education in employer’s institution - exempt upto ₹ 1000 p.m. per child ; Cost of refresher course; Any rent free residential; Goods sold by employer to employee; Contd …

6. Free ration received by employees; Perquisites to Govt. employees posted abroad; Rent free house given to officers of Parliament . Conveyance facilities to judges; Any amount contributed by employee towards pension; Computers, laptops given to employee for personal use; Transfer of movable assets – after using 10 years (or) more; Accident insurance premium; Interest-free (or) concessional loan ( not > ₹ 20,000 ); Periodicals and journals for discharge of work; Leave Travel Concession (LTC).

7. Perks taxable in all cases  Rent free accommodation;  Concession rent of accommodation;  Obligation of employee met by employer – (PT, IT)  Domestic servants engaged by employee and salary paid by employer;  Gas, electricity and water bills paid by employer;  Any bills in the name of employee for personal expenses paid by employer;  Gift (or) gift voucher exceeds ₹ 5,000;  Lunch (or) dinner provided – if cost per meal > ₹ 50.

8. Perks taxable in specified case s Specified employees mean, a) Director employee, (or) b) Employees having 20% (or) more voting rights in employer company, (or) c) Employees monetary salary is more than ₹ 50,000 /- p.a. [ Here, salary means all taxable benefit after deduction u/s 16(ii) and 16(iii) ] However, now-a-days, this classification does not have much practical utility, because of Salary norms of ₹ 50,000 /- p.a. Specified Employees-[ u/s 17(2)(iii) ]

9. VALUE OF CAR

10. 1. Car is owned / provided by the employer . Car is used only for official purpose – It is not a perquisite. It is fully exempted .

11. 2. Car is used exclusively for the private (or) personal purpose of employee (or) household members Actual expenditure (spent by employer) xxxxx Less : Amount received from employee xxxx Value of car – Taxable xxxxx

12. Particulars Small Car Upto 1.6 Litres Cubic Capacity (or) ≤ 1600 CC Big Car Above 1.6 Litres Cubic Capacity (or) > 1600 CC 1. When expenses are met by the employer ₹ 1800 per month ₹ 2400 per month 2. When expenses are met by the employee ₹ 600 per month ` 900 per month Note: If free driver (or) chauffeur is provided – ₹ 900 p.m. as salary is to be added and taxed. 3. Car for personal and official use