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As per section 17(2) "Perquisite" includes
The value of any rent-free accommodation provided to the assessee by his employer;
The value of any concession in the matter of rent respecting any accommodation provided to the assessee by his employer;
The value of any benefit or amenity (not being a benefit provided by a company free of cost or at concessional rate to its employees by way of allotment of shares, debentures or warrants directly or indirectly under Employees' Stock Option Plan or Scheme of the company, in accordance with the guidelines issued in this behalf by the Central Government) granted or provided free of cost or at concessional rate in the following cases: -
A company to a Director of that company;
A company to an employee being a person who has substantial interest (i.e., holding beneficially shares amounting not less than 20% of the total voting power) in the company;
An employer (including a company) to an employee (other than the above referred employees), whose salary computed as below does not exceed Rs.50,000/-.
|Less: Exemptions u/s 10||
|Less: Deductions u/s 16||
|Salary for the above purpose||
Any obligation payable by the employee, which is being met by the employer;
Any sum payable by the employer to effect an assurance on the life of the assessee or to effect a contract for annuity;
The value of any other fringe benefit or amenity, which is not chargeable in the hands of Employer.
However, Perquisite Valuation does not include certain medical benefits, which have been discussed at a later stage.
|1.||Where Government provides the accommodation to a person holding an office or post in connection with the affairs of the Union or State or serving with any body or undertaking under the control of such Government on deputation.||Licence fee determined by Union or State Government in respect of accommodation in accordance with the rules framed by that Government.|
|2.||Where any other employer provides such accommodation.||
Where accommodation is owned by employer: -
Perquisite Value is -
Where accommodation is taken on lease or rent by the employer: -
Perquisite Value is least of the following -
The Perquisite Valuation of rent-free furnished accommodation provided by the employer during the previous year to the employee is done in the following manner: -
For accommodations listed in S.No.1 & 2 of the table above: -
|Value of Rent-Free Unfurnished Accommodation||xxx|
Add: Value of Furniture & House-hold Equipments: -
10% of Original Cost of Furniture if furniture is owned by the employer
Hire Charges Payable if the furniture is hired by the employer
|Value of Rent-Free Furnished Accommodation||xxx|
No valuation of unfurnished Hotel Accommodation has been prescribed in Rule 3. Hence, it is presumed that no perquisite is chargeable, if unfurnished Hotel Accommodation is provided to the employee.
Perquisite value in respect of Furnished Hotel Accommodation is provided as the lower of the following: -
The Perquisite Valuation of concession in rent of accommodation provided by the employer during the previous year to the employee is done in the following manner: -
|Value of the accommodation, as if it is Rent-Free accommodation||xxx|
|Less: Rent Paid by Employee||xxx|
The following perquisites in respect of rent free accommodation or concession in rent of accommodation are not chargeable to perquisite with effect from 01.04.2001: -
As per Explanation to Rule 3(1), where the accommodation is provided by the Central Government or any State Government to an employee who is serving on deputation with any body or undertaking under the control of such Government: -
Accommodation includes a house, flat, farmhouse or part thereof, or accommodation in a hotel, motel, service apartment, guesthouse, caravan, mobile home, ship or other floating structure. [Explanation (i) to Rule 3].
Hotel includes licensed accommodation in the nature of motel, service apartment or guest- house. [Explanation (iii) to Rule 3].
Remote Area means an area located at least 40 kilometres away from a town having a population not exceeding 20,000 based on latest published all-India census. [Explanation (v) to Rule 3].
As per Explanation (vi) to Rule 3, "Salary" includes the pay, allowances, bonus or commission payable monthly or otherwise or any monetary payment, by whatever name called from one or more employers, as the case may be, but does not include the following: -
but includes any amount reimbursed by way of tax by the employer as per CBDT Letter F.No.35/26/64-IT(B) dated 25.05.1964.
The taxable value of domestic servants provided by the employer during the previous year to the employee or the member of the household: -
Salary paid or payable by the employer or any other person on his behalf, as reduced by any amount paid by the employee for such services.
The following table gives the taxable value of Gas, Electric energy and Water provided by the employer during the previous year for his household: -
|1.||Provided from resources owned by the employer.||Manufacturing cost per unit incurred by the employer.|
|2.||Purchased from outside agency and used wholly for Official purpose.||Not a perquisite.|
|3.||Purchased from outside agency and used wholly for Private purpose.||Amount paid by the employer to the agency|
|2.||Purchased from outside agency and used partly for Private and partly for Official Purpose.||Amount paid to agency for the portion home consumed.|
Where the employee pays any amount for the above service, the same shall be reduced from the perquisite value determined above.
Great things are not done by impulse, but by a series of small things brought together. Vincent van Gogh