Taxable Perquisite Value

On this page:

  1. Perquisite Valuation of Motor Car Provided by the Employer
  2. Taxable Perquisite Value of Conveyance Owned by the Employee
  3. Perquisite Valuation of Educational Facilities
  4. Perquisite Valuation of Transport Facility

Taxable Perquisite Value of Motor Car Provided by the Employer New Rule 3(2)

The following table gives the taxable perquisite value for use of motor-car provided by the employer during the previous year to the employee.

Car Owned Expenses met or reimbursed by Purpose Perquisite Value
by Employee Employee Wholly Official Not a Perquisite
Wholly Private Not a Perquisite
Partly Official Partly Private Not a Perquisite
by Employee Employer Wholly Official Not a Perquisite
Wholly Private Not provided for in the rules. However, Actual Expenditure incurred by Employer (including Driver's Salary) can be treated as Perquisite.
Partly Official Partly Private

Actual expenditure incurred by the employer as reduced by the following amounts: -

For cars up to 1.6 litres cc - Rs.1,800 p.m.

For cars more than 1.6 litres cc - Rs.2,400 p.m.

Driver (if provided) - Rs.900 p.m.

or Hired by Employer Employer Wholly Official Not a Perquisite
Wholly Private Running and Maintenance expenditure, Normal Wear and Tear (Hire Charges), Driver's Salary.
Partly Official Partly Private

For cars up to 1.6 litres cc - Rs.1,800 p.m.

For cars more than 1.6 litres cc - Rs.2,400 p.m.

Driver (if provided) - Rs.900 p.m.

or Hired by Employer Employee Wholly Official Not a Perquisite
Wholly Private Not provided for in the rules. However, Normal Wear and Tear (Hire Charges), Driver's Salary can be treated as Perquisite.
Partly Official Partly Private

For cars up to 1.6 litres cc - Rs.600 p.m.

For cars more than 1.6 litres cc - Rs.900 p.m.

Driver (if provided) - Rs.900 p.m.

Private purpose includes providing car for the employee, for his personal use, or to any member of his household.

Where one or more motor-cars are owned or hired by the employer and the employee or any member of his household are allowed the use of such motor-car or all or any of such motor-cars (otherwise than wholly and exclusively in the performance of his duties), the value of perquisite shall be,

the amount calculated in respect of one motor-car as under [as specified in rule 3(2)(A)(1)(c)(i)]: -

  • For cars up to 1.6 litres cc - Rs.1,800 p.m.
  • For cars more than 1.6 litres cc - Rs.2,400 p.m.
  • Driver (if provided) - Rs.900 p.m.

The amount calculated in accordance with the provisions of rule 3(2)(A)(1)(b), i.e., the running and maintenance expenditure (including driver's salary), normal wear and tear of the car (or) Hire Charges thereof, in respect of other cars.

Where any amount is charged from the employee for the use of car, then the perquisite value determined above shall be reduced by the amount so charged.

Normal wear and tear shall be taken at 10% per annum of the actual cost of the motor-car(s).

Where the employer or the employee claims that the motor-car is used wholly and exclusively in the performance of official duty [except in the case where the car is owned by employee and expenses are incurred by employee], or that actual expenses on running and maintenance of the motor-car owned by the employee for official purposes is more than the amounts deductible under

  • Rule 3(2)(ii) [i.e., where car is owned by employee and used partly for official purpose and partly for private purpose, the expenses of which are incurred or reimbursed by employer]

  • Rule 3(3)(ii) [i.e., any other conveyance owned and used by the employee, partly for official purpose and partly for private purpose and the expenses of which are reimbursed by employer]

he may claim higher amount of charges met or reimbursed by the employer as reduced by such higher amount attributable to official use of the vehicle, provided the following conditions are fulfilled: -

  • the employer has maintained complete details of journey undertaken for official purpose which may include date of journey, destination, mileage, and the amount of expenditure incurred thereon.

  • the employer certifies that the expenditure was incurred wholly and exclusively for the performance of his official duty.

Top

Taxable Perquisite Value of Conveyance Owned by the Employee

Where any other conveyance is owned by the employee and the actual running and maintenance charges are reimbursed by the employer, the following are the taxable perquisites:

Wholly for official purpose No Perquisite
Wholly for private purpose Actual amount incurred by employer
Partly for Official and Partly for private purpose Actual amount incurred by employer as reduced by Rs.900 per month.

Top

Taxable Perquisite Value of Educational Facilities New Rule 3(5)

The following table gives the taxable perquisite value of Educational Facility provided by the employer during the previous year to the member of the household: -

S.No. Education Provided for any member of the household Perquisite Value
1. In a school maintained, owned or run by the employer

Cost of similar education in or near the locality.

However, if the value of such benefit does not exceed Rs.1,000 p.m. per child, then the Perquisite is taken as Rs.Nil.

2. Any other educational institution by reason of his being in employment of that employer
3. Value of benefit of provision of free or concessional educational facilities. Amount of expenditure incurred in that behalf.

Top

Taxable Perquisite Value of Transport Facility New Rule 3(6)

The following table gives the taxable perquisite value of transport facility for private purposes, free of cost or at concessional fare provided by the employer during the previous year to the employee (other than a Railway or Airways Employee) or the member of the household: -

S.No Source Perquisite Value
1. Provided by an undertaking engaged in the carriage of passengers or goods in any conveyance owned, leased or made available by any other arrangement by the undertaking. Value at which such benefit or amenity is offered by such undertaking to the public.
2. In any other case Cost incurred.

Top

Great things are not done by impulse, but by a series of small things brought together. Vincent van Gogh

Top

Top

New! Comments

Have your say about what you just read! Do you want us to add any other information related to this topic? Let us know.

submit to reddit

Protected by Copyscape Duplicate Content Detection Tool

Free Newsletter

Our Monthly newsletter ‘Online Tax Consultant’ is the ideal way to make sure you miss nothing in the world of Taxation in India.

Email

Name

Then

Income Tax Questions
Have Questions on Tax?

Salary Income Tax
Salary Taxation

House Property Tax
House Property

Capital Gains Income Tax
Capital Gains

Business Income Tax
Business Tax

Corporate Tax
Corporate Tax

Other Sources Income Tax
Other Sources