Perquisites under the Income Tax Act

Perquisites is characterized as an advantage which one appreciates or is qualified for by virtue of one’s activity or position in the word reference. Thus, perquisites are added to the head Salaries while recording salary government form. Under the area 17(2) of the Income Tax Act, perquisites include:

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  1. Estimation of lease free convenience gave to the assessee by his boss.
  2. Estimation of any concession in the matter of lease in regard of any convenience gave to the assessee by his manager.
  3. Estimation of any advantage or comfort allowed or given free of expense or at concessional rate in any of the accompanying cases:
  4. By an organization to a representative who is an executive thereof.
  5. By an organization to a representative being a man having considerable enthusiasm for the organization; or
  6. By any business, including an organization, to any representative whose pay under the head ‘pay rates’ barring the estimation all things considered or enhancements not accommodated by method for money related installments surpasses fifty thousand rupees.
  7. In any case, utilization of any vehicle given to travel by the assessee from his habitation to his office or other work environment and back to his living arrangement will not be viewed as an advantage or convenience conceded or gave to him free of expense or at concessional rate.
  8. Sum paid by the business in regard of any commitment which, however for such installment, would have been payable by the assessee.
  9. Sum paid to influence a confirmation on the life of the assessee or to impact an agreement for an annuity generally through a predetermined or endorsed finance.
  10. Estimation of representative investment opportunities or sweat value shares assigned or exchanged free of expense or at concessional rate to the worker.
  11. Boss’ commitment to superannuation support, not surpassing rupees one lakh fifty thousand.
  12. Estimation of some other incidental advantage or enhancement which include:
  13. Estimation of settlement gave to the representative.
  14. Estimation of utilization of engine vehicle gave to the worker.
  15. Estimation of administrations of a sweeper, guard, nursery worker and individual specialist.
  16. Estimation of supply of gas, power or water for worker’s family unit utilization.
  17. Estimation of free or concessional instructive offices gave to individuals from family unit of the worker.
  18. Estimation of free of expense or concessional charge by a business occupied with business of carriage of merchandise or travelers gave to any individual from the family of worker.
  19. Estimation of advantage emerging from the arrangement of intrigue free or concessional advance gave to the representative or any individual from the family of the worker.
  20. Benefit of voyaging, visiting, settlement and some other costs paid for or borne or repaid by the business for any occasion profited of by the worker or any individual from his family unit.
  21. Estimation of free nourishment and non-mixed refreshments given by the business to a representative barring such arrangement amid working hours at office or business premises or through non-transferable paid vouchers useable at just eating joints.
  22. Estimation of any blessing or voucher or token in lieu of which such blessing can be gotten by the worker or any individual from his family unit, where such incentive in total surpasses rupees five thousand amid the earlier year.
  23. Measure of enrollment expense and yearly charge brought about by the worker or any individual from his family charged to a Mastercard including any extra card borne by the business.
  24. Measure of yearly or periodical expense in a club acquired by the worker or any individual from his family borne by the business.
  25. Estimation of use of any portable resource of the business utilized by the representative or any individual from his family.
  26. Estimation of advantage emerging from the exchange of a portable resource having a place with the business to the worker or any individual from his family.
  27. Estimation of some other advantage or courtesy, administration, right or benefit given by the business.

 

Representative Benefits Not Treated as Perquisites

The accompanying advantages gotten by a representative ought not to be treated as perquisites. Subsequently, the accompanying things won’t be incorporated under the head of Salaries:

  1. Estimation of any restorative treatment gave to a worker or any individual from his family in any healing facility kept up by the business.
  2. Entirety paid by the business in regard of any consumption really brought about by the representative on his medicinal treatment or treatment of any individual from his family:
    1. In any healing facility kept up by the Government or any nearby expert or some other clinic affirmed by the Government for the reasons for restorative treatment of its workers;
    2. In regard of the recommended ailments or sicknesses, in any clinic endorsed by the Principal Chief Commissioner or Chief Commissioner having respect to the endorsed rules. In such a case the representative will connect with his arrival of salary a declaration from the healing facility indicating the ailment or sickness for which restorative treatment was required and the receipt for the sum paid to the doctor’s facility.
  3. Premium borne by a business in connection to a worker, to impact or to keep in power a protection on the soundness of such representative or individual from his family under any plan affirmed by the Central Government or the Insurance Regulatory and Development Authority.
  4. Any aggregate paid by the business in regard of any consumption really caused by the worker on his restorative treatment or treatment of any individual from his family not surpassing fifteen thousand rupees in the earlier year.
  5. Any consumption brought about by the business or paid by the business to the representative in regard of:
    1. Medicinal treatment of the worker, or any individual from the group of such representative, outside India.
    2. Travel and remain abroad of the worker or any individual from the group of such representative for therapeutic treatment.
    3. Travel and remain abroad of one specialist who goes with the patient regarding such treatment, subject to the condition that the use on therapeutic treatment and remain abroad will be rejected from perquisite just to the degree allowed by the Reserve Bank of India; and
  6. The use on movement will be barred from perquisite just on account of a representative whose gross aggregate salary, as processed before including in that the said consumption, does not surpass two lakh rupees.

 

Perquisites are quite important when it comes to the employer and the employee relationship. Hence, it has been an integral and vital part of the head salaries since these ensure some added bonus and additional benefits for the employee.

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