SBI’s Rate of Interest for Perquisite Valuation Introduction The taxable value of the perquisite arising from free or concessional loans extended by employers is determined based on the State Bank of India’s (SBI) interest rates as of April 1 of the relevant financial year. Key Provisions Applicability Perquisite tax applies to loans for personal purposes… Read More »
Taxability of Interest on Contribution to Provident Fund (PF) Introduction Interest on employee contributions to Recognized Provident Fund (RPF) and Statutory Provident Fund (SPF) is exempt under Sections 10(11) and 10(12). However, exemptions are restricted for contributions exceeding Rs. 2,50,000 (or Rs. 5,00,000 for funds without employer contributions). Key Provisions Employer’s Contribution Interest on contributions up to 9.5% is… Read More »
Taxability of Perquisite under Section 17(2)(viia) Introduction Employer contributions exceeding Rs. 7,50,000 annually to Recognized Provident Fund (PF), National Pension Scheme (NPS), and Superannuation Fund, along with annual accretion on such excess, are taxable as perquisites. Applicability Contributions by the employer across all welfare funds exceeding 7,50,000 are taxable. Annual accretion, such as interest, dividends, or… Read More »
Relief from Taxation of Income from Foreign Retirement Benefit Account Introduction Section 89A provides resident individuals the option to defer tax on income from foreign retirement benefit accounts. Instead of taxing the income on an accrual basis, tax is deferred to the year of withdrawal, applicable to accounts in notified countries and by filing Form 10EE electronically. Eligibility… Read More »
Section 89 Relief from Salary Introduction Section 89 provides relief to employees to mitigate additional tax liability arising due to receipt of arrears, advance salary, or other lump sum payments, which may result in higher tax rates in the year of receipt. Eligibility for Relief Relief is available for the following: Salary arrears or advance salary.… Read More »
Perquisite – Superannuation Fund Introduction Superannuation is a retirement benefit wherein the employer contributes annually to a group superannuation policy to provide pension payments to employees upon retirement. The fund earns interest similar to provident fund rates. Employees can transfer their accumulated superannuation balance to a new employer’s approved fund or withdraw it, subject to… Read More »
Perquisites – ESOPs Introduction Employee Stock Option Plans (ESOPs) are schemes where employers offer securities to employees either free of cost or at a concessional rate. The difference between the fair market value (FMV) and the amount paid by the employee is treated as a taxable perquisite in the year of allotment. In the case… Read More »
Perquisite – Credit Card Facility Introduction When employers provide a credit card facility for personal expenses of employees or their family members, the benefit is taxable as a perquisite. Official expenses are exempt if supported by proper documentation. Tax Treatment of Credit Card Facility Personal Expenses Taxable value = Total expenses borne by the employer,… Read More »
Perquisites – Club Facility Introduction Expenses incurred by employers for club memberships or facilities used by employees or their family members are generally taxable as perquisites. Specific exemptions apply for health or sports clubs provided uniformly to all employees. Tax Treatment of Club Facilities Health or Sports Club Exempt from tax if facilities are provided… Read More »
Perquisites – Holiday Facilities Introduction Holiday facilities provided by employers to employees or their family members are taxable as perquisites. However, specific exemptions may apply based on the nature of the facility. Tax Treatment of Holiday Facilities Official Tour Tax-free if expenses are incurred solely for official purposes. If family members accompany the employee, the… Read More »