Last modified / updated Feb. 04, 2016
Income Tax Act, 1961 : Income Exempted and Chargeable under the Head "Salaries"
14. Perquisite - Gas, electricity & water for household consumption
The value of perquisite in the nature of gas, electricity and water shall be the amount paid or payable by the Where the supply is made from the employer's own resources, the manufacturing cost per unit incurred by
the employer would be taken for the valuation of perquisite. Any amount paid by the
employee for such facilities or services shall be reduced from the perquisite value.
15. Interest free or concessional loans
It is common practice, particularly in
financial institutions, to provide interest free or concessional loans to employees or any
member of his household. The value of perquisite arising from such loans would be the excess
of interest payable at prescribed interest rate over interest, if any, actually paid by the
employee or any member of his household. The prescribed interest rate would now be the
rate charged per annum by the State Bank of India as on the 1st day of the relevant financial
year in respect of loans of same type and for the same purpose advanced by it to the general
public. Perquisite value would be calculated on the basis of the maximum outstanding
monthly balance method.
16. Value of Subsidized / Free food / non-alcoholic beverages provided by employer to an
employee
Value of taxable perquisite is calculated as under:
Expenditure incurred by the employer on the value of food / non-alcoholic beverages including
(1) Paid vouchers which are not transferable and usable only at eating joints = A
(2) Less: Fixed value of a sum of Rs. 50/- per meal
(3) Less: Amount recovered from the employee
Balance (1) - (2) -(3) amount is the taxable non- monetary perquisites on the value of food
provided
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