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 taxable value is the actual expenses incurred for them, reduced by any amount recovered from the employee.
- Official Tour Extended as Vacation
- Taxable value includes expenses for boarding, lodging, and local tours during the vacation period, less any amount recovered from the employee.
- Employer-Maintained Holiday Facility
- Uniform Availability: Tax-free if the facility is uniformly available to all employees.
- Non-Uniform Availability: Taxable at the rate offered by similar facilities to the public, reduced by any amount recovered from the employee.