Perquisites
Introduction
Perquisites refer to benefits or facilities provided by an employer to an employee in addition to salary. These benefits are taxable under the head “Salaries” when provided during employment.
Definition and Examples
- Perquisites are emoluments for the personal benefit or use of the employee, in cash or kind, or money’s worth.
- Example: A personal watchman is taxable as a perquisite, whereas one provided for official purposes is not.
Key Inclusions in Perquisites
- Rent-free or concessional accommodation.
- Use of motor car or other employer-provided assets.
- Facilities such as gardener, watchman, or servant.
- Free or concessional gas, electricity, or water supply.
- Free or concessional education for children.
- Transport facility.
- Employer-paid obligations of the employee.
- Insurance facilities.
- Employee stock options (ESOPs) or sweat equity shares.
- Contributions to retirement funds exceeding 7,50,000.
- Loans at concessional or nil interest rates.
- Leave travel concession (LTC).
- Gifts, club facilities, or free food and refreshments.
- Mobile or telephone facilities.