Professional Documents
Culture Documents
• Salary includes –
- basic salary
- DA ( if terms of employment provide)
- bonus, commission, fees
- all other taxable allowances
- any monetary payment chargeable to tax, but
not monetary payments in the nature of
perquisite
Exception to accomodation rules
• It is not applicable to an accomodation
located in a remote area( 40 kms from town)
and in a mining, project ,oil exploration site
• Where on account of transfer, an employee is
given two accomodation , only one will be
taxed for 90 days. Beyond that the lesser of
the two will be taxed.
Furnished accomodation
• Step 1: Find out the value of the
accomodation without the value of the
furniture
• Add 10% of the value of furniture if owned by
employer or actual hire charges when hired
( Furniture includes TV, fridge, radio and any
household appliances)
Furnished accomodation in a Hotel
It Includes accomodation in a motel, guest
house.
The value of perquisite is the lower of the two.
• 24% of salary paid during the period when
accomodation is taken or
• Actual paid by the employer
(not taxable if provided for 15 days in a P.Y. and
when an employee is transferred)
Accomodation at a concessional value
Value is determined as follows:
• Find out the value of accomodation as if it is
not provided at a concession
• Deduct the value of rent charged from the
employee
Perquisite of free domestic servants
• When servants are engaged by employee and
reimbursed by employer, taxable in all cases
• When engaged by employer only specified
employees are taxable
• Servant allowances are always taxable
• If servants are provided in a rent free
accomodation , they are not valued separately
Valuation of gas, electric energy or water
supply
• All assesses are taxable except non specified
employees
Perquisite of Motor Car
Perquisite in respect of motor car is taxable only when
the employer is not liable to fringe benefit tax (like
sole proprietor, charitable institutions, etc) Private
company employees will not pay any tax.
• 1.Car is owned by Employee
• 2. Car is owned or hired by Employer
a) Expenses met by Employer
b) Expenses met by Employee
Motor car perquisite
• Car owned by Employee
a) Expenses met by Employee - No Tax
b) Expenses met or reimbursed by Employer
- Official purpose only No tax
- Used for private purpose-actual expenses
less recovery taxable
-Partly used for private purpose (cont. next
slide)
Motor car perquisite( Cont.)
Car owned by employee (cont.)
-Partly used for private purpose
EMPLOYEE USES
MORE THAN 1 CAR
FOR PRIVATE
PURPOSES
IN RESPECT OF OTHER
IN RESPECT OF 1 CAR
CAR(S)