Perquisite valuation for fringe benefits for Income tax calculation in India. Topics Covered in this Page Fringe Benefits: [New Rule 3(7)] Other Benefits Chargeable in the hands of Specified employees:
The taxable value of interest subsidy provided by the employer during the previous year to the employee or the member of the household is calculated as below Source Loan provided by the employer to all the employees at a concessional rate of interest or free of interest. Interest subsidised by the employer for loan taken by him from outside source or for loan taken by the employee himself. Perquisite Value Interest subsidy is taxable based on the simple interest on the maximum outstanding monthly balance. The interest rate is prescribed by State Bank of India for such loan. Taxable value of Interest subsidy = (Interest subsidy - interest recovered from the employee or any member of the household). However in the following cases Interest subsidy is Not taxable. Loans are made available for medical treatment in respect of diseases specified in Rule 3A. However, where any amount is reimbursed to the employee under any medical insurance scheme, then such portion of loan received and not utilised for repayment of the loan borrowed from employer, is taxable. - Where the amount of loans are petty (not exceeding in aggregate Rs.20,000).
Explanations: - The Maximum Outstanding Monthly Balance [as per explanation (vii) to rule 3] means: The aggregate outstanding balance for each loan as on the last day of each month. Interest[Section 2(28A)] means Interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) Interest includes: Go to Top
The value of benefit to the employee resulting from the use by the employee or any member of his household of any movable asset belonging to the employer or hired by him. | If the asset is owned by the employer | 10% p.a. of actual cost of asset | | If the asset is hired by the employer | Hire charges paid or payable | Note: For this purpose, movable asset does not include laptops and computers. Where the employee pays any amount for the above service, the same shall be reduced from the perquisite value determined above. Go to Top
The value of benefit to the employee arising from the transfer of any movable asset belonging to the employer, Directly or Indirectly shall be determined as under: -
| Cost of such Asset | | xxx | | Less: Cost of Normal Wear and Tear | xxx | | | Cost recovered from the employee | xxx
--- | | | | xxx | | | --- | | Perquisite Value | | xxx
--- | The cost of normal wear and tear is as under: - S.No. | Description of the Asset | Method of Depreciation | Rate of Wear & Tear Per Annum | Depreciation to be provided for |
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| 1 | Motor-cars | Reducing Balance | 20% | Only in respect of completed years | | 2 | Computers | Reducing Balance | 50% | Only in respect of completed years | | 3 | Other Assets | Straight Line | 10% | Only in respect of completed years |
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Taxable value of domestic servants provided by the employer during the previous year to the employee or the member of the household is calculated as given below | Salary paid or payable by the employer for Domestice Service | xxx | | Less: Amount paid by the employee for Domestice Service | xxx
--- | | Perquisite Value | xxx
--- | Go to Top
The following table gives the taxable value of Gas, Electric energy and Water provided by the employer during the previous year for his household: - Source: Provided from resources owned by the employer Manufacturing cost per unit incurred by the employer. Source: Purchased from Outside Agency | Used wholly for Official purpose | Not a perquisite | | Used wholly for Private purpose | Amount paid by the employer to the agency. | | 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. Go to Top
The following table gives the taxable 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 |
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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. |
Where the employee pays any amount for the above service, the same shall be reduced from the perquisite value determined above. Go to Top
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