Exempt benefits - Perquisite

Salary Exempt benefits - Perquisites: -

The following facilities paid/reimbursed/provided are not treated as perquisite as per section 17(2) of Income Tax Act, India.

All these benefits are not taxable.

Topics Covered in this Page

• Perquisite Exemptions for Medical Facilities

• Perquisite Exemptions for ESOP

• Perquisite Exemptions for Leave Travel Concession

• Perquisite Exemptions for Indian Citizen Employed Abroad

• Exemptions for Tax Paid by employer for Non-monetary Perquisites

• Telephone and Mobile Phone Expenses are fully exempt.

Exempt benefits - Medical Facilities

• Medical treatment of the employee or his family (spouse and children, dependant - parents, brothers and sisters): -

  • Provided in any hospital maintained by the employer.

  • Any sum paid by the employer towards expenditure actually incurred by the employee in any hospital: -

    • Maintained by Government or Local Authority or any other hospital approved by Central Government for the purposes of medical treatment of its employees;

    • Approved by the Chief Commissioner having regard to the prescribed guidelines in respect of prescribed diseases.

  • Amount payable for treatment Outside India: -

    • Medical expenses - to the extent permitted by RBI.

    • If Gross Total Income (before including the travel expenditure) of the employee, does not exceed Rs.2,00,000/-, then travel abroad for patient and one attendant - fully deductible.

    • Stay abroad for patient and one attendant - permitted by RBI.

  • Any sum, not exceeding Rs.15,000/-, paid to any hospital.

• Premium paid by an employer by cheque to General Insurance Corporation to effect/keep in force:

  • Insurance on the health of his employees.

  • Medical Insurance Premia.

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Exempt benefits - ESOP

With effect from 01.04.2007, transfer or allotment of shares under ESOPs by a Company to an employee, is totally exempt from tax in the hands of Employees.

It is now chargeable in the hands of the employer under FBT.

Prior to this date, the Stock Options were liable to charge in the hands of specified employees only.

However, if such options are provided to the employees in accordance with the guidelines issued in this behalf by the Central Government, then they are exempt.

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Exempt benefits - Leave Travel Concession

Exemption for Leave Travel Concession is available to the following extent: -

1. Air Travel

   Amount Exempt: - Economy Fare in National Carrier

2. By any other mode of Transport

   (a) If place of Origin and Destination is connected by Railway line

   I Class AC Rail Fare

   (b) No Rail Facility Available

   (i) Where Recognised Public Transport System exists

   I Class or Deluxe Fare on such Recognised Transport System

   (ii) Other Cases

   I Class AC Railway Fare, as if Railway line exists

Note:-

All the fares are by the shortest route and are only the maximum ceiling.

Where actual expenses are lesser than the above fares, then the actual expenses are alone exempt.

The travel concession is available to the

• Individual

• His spouse and

• Children (Not more than two surviving children on or after 01.10.1998.)

However, the restriction is not applicable to

• Children born before 01.10.1998 and

• Multiple births after a single child, and

• Wholly or mainly dependant - parents, brothers and sisters

And travel in connection with his proceeding: -

• on leave to any place in India.

• to any place in India after retirement/termination of service.

Number of Eligible Trips: -

The number of trips eligible for exemption is two in a block of four calendar years running from 1986.

Therefore the block for the current Assessment Year 2006-2007 is 01.01.2002 to 31.12.2005 & 01.01.2006 to 31.12.2009.

In case only one concession or no concession has been availed in any block, then one additional concession can be claimed in the first year of the succeeding block.

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Exempt benefits - Perquisite Of Indian Citizen Employed Abroad

Perquisite Exemption for Indian Citizen Employed Abroad: -

Any perquisite paid or allowed outside India by the Government to a citizen of India for rendering service outside India is exempt.

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Exempt benefits - Others

Tax paid on behalf of any employee in respect of non-monetary perquisites received as defined under section 17(2), at the option of the employer, is exempt.

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