Perquisite – Use of Employer Assets
Introduction
When an employee or their family uses movable assets owned or hired by the employer, or purchases such assets at concessional rates, the value of these benefits is taxable as a perquisite.
Key Provisions
- Valuation of Perquisite
- Computers or Laptops:
- Usage: Tax-free.
- Purchase: Taxable value = Cost to the employer − Depreciation (50% per year, reducing balance).
- Motor Cars:
- Usage: Taxable as per Rule 3 (based on ownership, maintenance costs, and usage).
- Purchase: Taxable value = Cost to employer − Depreciation (20% per year, reducing balance).
- Other Assets(e.g., appliances, furniture):
- Usage: Taxable value = 10% p.a. of the asset’s cost, less any amount recovered.
- Purchase: Taxable value = Cost to employer − 10% for each completed year (straight-line basis).
- Hired Assets:
- Taxable value = Rent paid by employer, less any recovery from the employee.
- Depreciation and Completed Year
- Depreciation:
- Computers/laptops: 50% (reducing balance).
- Cars: 20% (reducing balance).
- Other assets: 10% (straight-line).
- A “completed year” means a full 12 months. Partial years are not considered.
- Exemptions
- Usage of employer-provided laptops and computers is tax-free.