A tax privilege, which can also be described as a perquisite, is something that can apply to person for the type of work than person does or their actual position. What if income tax return is not filed? Well there are always consequences that need to be considered. With Income Tax Returns these privileges are noted on the official reports when they are submitted.
Under Income Tax Act, 17(2) these prerequisites are follows:
• 1. Prerequisites related to values of any benefit or amenity granted or provided free of cost or at concessional rate in any of the following cases:
1.1. By a company to an employee who is a director thereof.
1.2. By a company to an employee being a person who has a substantial interest in the company; or
1.3. By any employer, including a company, to any employee whose income under the head ‘salaries’ excluding the value of all benefits or amenities not provided for by way of monetary payments exceeds fifty thousand rupees.
However, use of any vehicle provided for a journey by the assessee from his residence to his office or other places of work and back to his residence shall not be regarded as a benefit or amenity granted or provided to him free of cost or at the concessional rate.
• 2. Prerequisites related to values of any other fringe benefit or amenity which include:
2.1. Value of accommodation provided to the employee.
2.2. Value of use of a motor car provided to the employee.
2.3. Value of services of a sweeper, watchman, gardener and personal attendant.
2.4. Value of supply of gas, electricity or water for employee’s household consumption.
2.5. Value of free or concessional educational facilities provided to members of the household of the employee.
2.6. Value of free of cost or concessional fare by an employer engaged in the business of carriage of goods or passengers provided to any member of the household of the employee.
2.7. Value of benefit arising from the provision of an interest-free or concessional loan provided to the employee or any member of the household of the employee.
2.8. Value of travelling, touring, accommodation and any other expenses paid for or borne or reimbursed by the employer for any holiday availed of by the employee or any member of his household.
2.9. Value of free food and non-alcoholic beverages provided by the employer to an employee excluding such provision during working hours at office or business premises or through non-transferable paid vouchers useable at only eating joints.
2.10. Value of any gift or voucher or token in lieu of which such gift can be received by the employee or any member of his household, where such value in aggregate exceeds rupees five thousand during the previous year.
2.11. Amount of membership fee and annual fee incurred by the employee or any member of his household charged to a credit card including any add-on card borne by the employer.
2.12. Amount of annual or periodical fee in a club incurred by the employee or any member of his household borne by the employer.
2.13. Value of usage of any movable asset of the employer used by the employee or any member of his household.
2.14. Value of benefit arising from the transfer of a movable asset belonging to the employer to the employee or any member of his household.
2.15. Value of any other benefit or amenity, service, right or privilege provided by the employer.
• 3. Prerequisites related to values of rent-free accommodation provided to the assessee by his employer.
• 4. Prerequisites related to values of any concession in the matter of rent in respect of any accommodation provided to the assessee by his employer.
• 5. Prerequisites related to values of employee stock options or sweat equity shares allotted or transferred free of cost or at concessional rate to the employee.
• 6. Prerequisites related to values of employer’s contribution to a superannuation fund, not exceeding rupees one lakh fifty thousand.
• 7. Prerequisites related to amounts paid to affect an assurance on the life of the assessee or to effect a contract for an annuity otherwise through a specified or approved fund.
• 8. Prerequisites related to amounts paid by the employer in respect of any obligation which, but for such payment, would have been payable by the assessee.
Benefits to Employees Outside of Privileges
There are certain benefits that employees receive that do not classify as privileges or perquisites and they will not be referred to as part of the Salaries calculated filing returns. These are as follow below. What if income tax return is not filed? As previously mentioned that are circumstance that need to be considered.
• 1. The sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family:
1.1. In any hospital maintained by the Government or any local authority or any other hospital approved by the Government for the purposes of medical treatment of its employees;
1.2. In respect of the prescribed diseases or ailments, in any hospital approved by the Principal Chief Commissioner or Chief Commissioner having regard to the prescribed guidelines. In such a case the employee shall attach with his return of income a certificate from the hospital specifying the disease or ailment for which medical treatment was required and the receipt for the amount paid to the hospital.
• 2. Premium that is borne by an employer in relation to an employee, to effect or to keep in force an insurance on the health of such employee or member of his family under any scheme approved by the Central Government or the Insurance Regulatory and Development Authority.
• 3. Value of any medical treatment provided to an employee or any member of his family in any hospital maintained by the employer.
• 4. Any expenditure incurred by the employer or paid by the employer to the employee in respect of:
4.1. Medical treatment of the employee, or any member of the family of such employee, outside India.
4.2. Travel and stay abroad of the employee or any member of the family of such employee for medical treatment.
4.3. Travel and stay abroad of one attendant who accompanies the patient in connection with such treatment, subject to the condition that the expenditure on medical treatment and stay abroad shall be excluded from perquisite only to the extent permitted by the Reserve Bank of India.
• 5. The expenditure on travel shall be excluded from perquisite only in the case of an employee whose gross total income, as computed before including therein the said expenditure, does not exceed two lakh rupees.
• 6. Any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family not exceeding fifteen thousand rupees in the previous year.
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