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, including membership and annual fees.
- Reduced by any amount recovered from the employee.
- Official Expenses
- Taxable value = Nil if the expenses are wholly and exclusively for official purposes.
- Documentation Required: Employer must maintain sufficient records, including details of the expenditure and a certificate confirming that it was incurred for official duties.