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Free Club Membership for Employees - Taxability of Perquisites

 

 

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QUESTIONS

 Q1

Basic salary  = 40000 p.m.

Company owns club where Employees get free use

Cost of running the club per member is Rs.2000 P.M and fees charged from members is Rs.3000

However Employees can use if for free

Calculate income from salary

---answer--

Value of club Perquisite Rs.2000x12 = 24000

--endanswer--

 

Q2 Suppose club facility is not free Employee have to pay a nominal charge of Rs.500 per month

--answer--

Value of club Perquisite = (2000  − 500)x12

                                                    = 1500 x12

                                                    = 18000

--endanswer--

 

 

  Q3 Suppose Employee and his wife has joined a health club and they pay Rs.3000 each (6,000 for both)

As per company policy they claim reimbursement of the same of maximum Rs.5,000

What is the value of Perquisite.

---answer--

Value of Perquisite = 5,000 p.m.(60000 annually i.e.the Cost to the Company)

--endanswer—

  1. Income Tax
  2. Income from Salaries
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CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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