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 »

Perquisite – Free Food Facility Introduction Free food, snacks, and beverages provided by employers during working hours can be tax-free under specific conditions. The exemption is subject to limits on the value and nature of the benefit. Tax Treatment of Free Food Facility Tax-Free Benefits Snacks, Tea, Non-Alcoholic Beverages: Not taxable when provided during office… Read More »

Perquisites – Medical Facilities Introduction Medical facilities provided by employers to employees or their family members can be tax-free under specific conditions. Taxability depends on the nature, location, and expenditure of the medical benefit. Tax Treatment of Medical Facilities Medical Facilities in India Medical facilities in India are Tax-free if provided to the employee or… Read More »

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… Read More »

Free or Concessional Loan to Employees Introduction Interest-free or concessional loans provided by employers to employees or their family members are taxable as perquisites under “Salaries.” However, petty loans up to Rs. 20,000 and loans for specified medical treatments are exempt. Taxability of Loans Situations Where Perquisite Arises Loans for personal purposes like education, marriage,… Read More »