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Unit 7: Income under the Head Salaries

5. Free or Concessional Education: The value of benefit to the employee resulting from the Notes
provision of free or concessional educational facilities for any member of his household
shall be determined as the sum equal to the amount of expenditure incurred by the employer
in that behalf of where the educational institution is itself maintained and owned by the
employer or where free educational facilities for such member of employees’ household
are allowed in any other educational institution by reason of his being in employment of
that employer, the value of the perquisite to the employee shall be determined with
reference to the cost of such education in similar institution in or near the locality.
Where any amount is paid or recovered from the employee on that account, the value of
benefit shall be reduced by the amount so paid or recovered. Provided that where the
educational institution itself is maintained and owned by the employer and free educational
facilities are provided to the children of the employee or where such free educational
facilities are provided in any institution by reason of his being in employment of that
employer, nothing contained in this sub-rule shall apply if the cost of such education or
the value of such benefit per child does not exceed ` 1,000 p.m.

6. Free Food and Non-alcoholic Beverages: The value of free food and non-alcoholic beverages
provided by the employer to an employee shall be the amount of expenditure incurred by
such employer. The amount so determined shall be reduced by the amount, if any, paid or
recovered from the employee for such benefit or amenity:
Provided that nothing contained in this clause shall apply to free food and non-alcoholic
beverages provided by such employer during working hours at office or business premises
or through paid vouchers which are not transferable and usable only at eating joints, to
the extent the value thereof either case does not exceed fifty rupees per meal or to tea or
snacks provided during working hours or to free food and non-alcoholic beverages during
working hours provided in a remote area or an off-shore installation.
7. Any Gift or Voucher or Token: The value of any gift, or voucher, or token in lieu of which
such gift may be received by the employee or by member of his household on ceremonial
occasions or otherwise from the employer shall be determined as the sum equal to the
amount of such gift: Provided that where the value of such gift, voucher or token, as the
case may be, is below five thousand rupees in the aggregate during the previous year, the
value of perquisite shall be taken as nil.
8. Membership Fees, Annual Fees for Credit Card: The amount of expenses including
membership fees and annual fees incurred by the employee or any member of his
household, which is charged to a credit card (including any add-on-card) provided by the
employer, or otherwise, paid for or reimbursed by such employer shall be taken to be the
value of perquisite chargeable to tax as reduced by the amount, if any paid or recovered
from the employee for such benefit or amenity:

Provided that there shall be no value of such benefit where expenses are incurred wholly
and exclusively for official purposes and the following conditions are fulfilled: complete
details in respect of such expenditure are maintained by the employer which may, inter
alia, include the date of expenditure and the nature of expenditure; the employer gives a
certificate for such expenditure to the effect that the same was incurred wholly and
exclusively for the performance of official duties.
9. Membership of Clubs: The value of benefit to the employee resulting from the payment or
reimbursement by the employer of any expenditure incurred (including the amount of
annual or periodical fee) in a club by him or by an member of his household shall be
determined to be the actual amount of expenditure incurred or reimbursed by such
employer on that account. The amount so determined shall be reduced by the amount, if
any paid or recovered from the employee for such benefit or amenity:

LOVELY PROFESSIONAL UNIVERSITY 195