Page 187 - DCOM301_INCOME_TAX_LAWS_I

Income Tax Laws – I

Notes 3. Value of any benefit or amenity granted free of cost or at a concessional rate in any of the
following cases:
(a) by a company to an employee who is a director there of

(b) by a company to an employee who has substantial interest in the company
(c) by any employer to an employee who is neither a director, nor has substantial
interest in the company, but his monetary emoluments under the head ‘Salaries’
exceeds ` 50,000.
4. Any sum paid by the employer towards any obligation of the employee.
5. Any sum payable by employer to affect an assurance on the life of assessee.
6. The value of any other fringe benefit given to the employee as may be prescribed.
For tax purposes, perquisites specified under Section 17(2) of the Act may be classified as follows:

1. Perquisites that are taxable in case of every employee, whether specified or not.
2. Perquisites that is taxable in case of specified employees only.
3. Perquisites those are exempt from tax for all employees.

Did u know? The term “Perquisite” is defined by section 17(2) as follows:
1. the value of rent-free accommodation provided to the assessee by his employer;
2. the value of any concession in the matter of rent respecting any accommodation
provided to the assessee by his employer;

Explanation 1: For the purposes of this sub-clause, concession in the matter of rent shall be
deemed to have been provided if:
(a) in a case where an unfurnished accommodation is provided by any employer other than
the Central Government or any State Government and –
(i) the accommodation is owned by the employer, the value of the accommodation
determined at the specified rate in respect of the period during which the said
accommodation was occupied by the assessee during the previous year, exceeds the
rent recoverable from, or payable by, the assessee;

(ii) the accommodation is taken on lease or rent by the employer, the value of the
accommodation being the actual amount of lease rental paid or payable by the
employer or fifteen per cent of salary, whichever is lower, in respect of the period
during which the said accommodation was occupied by the assessee during the
previous year, exceeds the rent recoverable from, or payable by, the assessee;
(b) in a case where a furnished accommodation is provided by the Central Government or
any State Government, the licence fee determined by the Central Government or any State
Government in respect of the accommodation in accordance with the rules framed by such
Government as increased by the value of furniture and fixtures in respect of the period
during which the said accommodation was occupied by the assessee during the previous
year, exceeds the aggregate of the rent recoverable from, or payable by, the assessee and
any charges paid or payable for the furniture and fixtures by the assessee;
(c) in a case where a furnished accommodation is provided by an employer other than the
Central Government or any State Government and –

(i) the accommodation is owned by the employer, the value of the accommodation
determined under sub-clause (i) of clause (a) as increased by the value of the furniture

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