Valuation of Educational Facilities

Valuation of Educational Facilities

Introduction
The educational facilities provided by employers for specified employees’ children are taxable as perquisites under “Salaries.” However, certain exemptions and valuation rules apply based on the type of benefit.

Key Provisions

1. Free Education Facility in Employer-Owned Institutions

• Exempt up to 1,000/month per child.
• Only the amount exceeding 1,000 is generally treated as a perquisite, per department instructions.
• Valuation is based on the cost of education in a similar local institution.
  2. Concessional Education Facility
• Fully taxable.
• Valued at the cost of similar education locally, minus any amount recovered from the employee.
  3. Reimbursement of Education Costs
• Fully taxable as a monetary perquisite (specified or non-specified employees).
  4. Direct Payment to Schools
• Taxable as a perquisite in the hands of specified employees [Circular No 35, Dated 12-02-1965]
• Valuation equals the amount paid by the employer, reduced by any recovery from the employee.
  5. Fixed Education Allowance
• Exempt up to:
  • 100/month per child (max. 2 children).
  • 300/month per child for hostel expenses (max. 2 children).

6. Education for Other Family Members

• Taxable for grandchildren or others based on the local cost of similar education.
• Reduced by any recovery from the employee.
  7. Education for Employees
• Free training or research-related benefits provided to employees are exempt if used for the intended purpose.