Perquisite u/s 17(2) r/w Rule 3

Section 17(2)(i) & (ii) r/w Rule 3(1) – RFA Section 17(2)(vi) r/w Section
Rule 3(8) – ESOP 17(2)(viii) r/w
Free of cost – Full value as perquisite Rule 3(7) –
FMV less amount
Concessional Rate – Value less amount Fringe Benefits
recovered from
paid by employee
employees

Unfurnished Accommodation not owned by Accommodation in a hotel

accommodation owned by
employer
Population less than 10
Lakhs – 7.5% of salary
Population 10 lakhs to 25
lakhs – 10% of salary
Population exceeding 25
lakhs – 15% of salary
employer
Rent paid by employer OR
15% of salary
W.E.L
Salary – B.P + D.A + Bonus + All
taxable allowance + other
monetary payment
Does not include – Perquisite
+ Retirement benefits
Hotel rent paid by employer
OR
24% of salary
W.E.L
Not considered as perquisite
only if accommodation is
provided to employee on
transferred and upto 15 days

Section 17(2)(viii) r/s Rule Section 17(2)(viii) r/s Rule

3(7) – Fringe Benefits 3(7) – Fringe Benefits only
to specified employees

Interest free Loan Travelling & tour Free food & non-alcoholic beverages Continued in
SBI Interest rate as facility next page
Free meals / food coupons provided
on 1st April of the
Amount of expenditure in exceeding Rs 50
year in which loan
incurred by employer
is availed (Loan amt Exempted: Tea, coffee, snacks, food
less amount paid by
not exceeding less than Rs 50 during working
employee (LTA
20,000) hours, free food in remote area
exempted u/s 10(5))
Gifts or vouchers provided to
employees
Gifts in cash – fully taxable
Gifts in kind – in excess of 5,000
taxable
Credit card facility
Expenditure incurred by employer in
respect of credit card used by
employee/ family (official purpose –
not taxable)
Club facility & free recreation
Expenditure towards annual/
periodical fees
Sports, health etc facility provided
uniformly to all employees / for
office purpose – exempt from tax

Use of movable assets of employer
All assets – 10% of value of assets
Laptop, computer – Not taxable
Motor car – Computed under Rule
3(2)
Transfer of movable assets belonging
to employer to employee
At a concessional amount
FMV of the asset transferred less
actual amount paid - Taxable
Any other amenities extended by
employer to employee
Amount of benefit derived -
Taxable

Section 17(2)(viii) r/s Rule 3(7) – Fringe Benefits only to specified employees

Use of Motor car of employer for
personal purpose
Only for personal purpose - Taxable
Partly for personal & official – Rates
Only for official purpose – Not
taxable
Services of domestic servants like
sweeper, cook, driver, watchman,
gardener and attendant etc
Salary paid to the servants by the
employer
Supply of gas, electricity, water for
household
Amount paid by employer if
purchased from outside agency

Education facility Medical perquisite under proviso to section 17(2)

Children – Cost of education / fees in Expenditure incurred or reimbursement by employer for medical
similar school in nearest location Less treatment in India in the following hospitals not taxable:
Rs 1000 per month
Hospital owned by employer
Reimbursement of school fees – Fully
Government hospital
taxable
And medical insurance paid by employer on behalf of employee – not
Training to own employees – Not
taxable
taxable