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.- prcapk@gmail.com

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 cases
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