The term, “perquisite” is defined under Section 17(2) of the
Income Tax Act. This is an inclusive definition, meaning whatever is not included cannot be supposed to be
excluded. The following items are included in the definition of perquisite:
Value of rent-free accommodation provided by
employer to the employee (Section 17(2)(i))
Value of any concession granted in rent for any
accommodation provided by employer to employee (Section 17(2)(ii)). This also includes the concession deemed to
have been provided under certain circumstances.
Value of any benefit or amenity granted or provided
by employer to employee free of cost or at concessional rate in any of the following cases (Section
By a company to its
By a company to its employee who is having
substantial interest in the company.
By any employer including a company to an employee
whose annual income from salary is Rs.50000 or more (other than covered above)
All above three are called ‘specified
Use of any vehicle provided
by a company or an employer for journey by the assessee from his residence to his office or
other place of work, or from such office or place of work to his residence, cannot be
regarded as a benefit or amenity granted or provided to him free of cost or at concessional
Employee having substantial
interest in the Company: If he is the beneficial owner of 20% or more voting power in the
Whose income under the head
“salaries” whether due from or paid or allowed by, one or more employees, exclusive of benefits
or amenities not provided for by way of monetary payment, exceeds Rs.50,000.
Any sum paid by the employer in respect of certain
obligations of the employee, which, but for such payment, would have been met by the employee himself (Section
Any sum payable by the employer, whether directly or
through a fund, other than a recognised provident fund or an approved superannuation fund or a deposit-linked
insurance fund established under section 3G of the Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948
or, as the case may be, Section 6C of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, to
effect an assurance on the life of the assessee or to effect a contract for an annuity. (Section
The value of any specified security or sweat equity
shares allotted or transferred, directly or indirectly, by the employer, or former employer, free of cost or at
concessional rate to the assessee (Section 17(2)(vi)).
The amount or the aggregate amounts of any
contribution made to the account of the assessee by the employer:
In a recognised provident fund
In a pension scheme notified under Section
an approved superannuation fund
To the extent it exceeds Rs.7,50,000 in a previous year.
The annual accretion by way of interest, dividend or
any other amount of similar nature during the previous year to the balance at the credit of the fund or scheme or
scheme referred to in above to the extent it relates to the contribution referred to above which is included in the
total income in any previous year computed in such manner as may be prescribed.
The value of any other fringe benefit or amenity as
may be prescribed. (Section 17(2)(viii)).
The value of any medical treatment provided to an employee or
any member of his family in any hospital maintained by the employer will not be considered as a perquisite under