This provison covers  5 perquisites which can be either

Monetary (Reimbursement or claim)


Non monetary (free facility)


If they are monetary ,they are taxable for all employees.

However if they are non monetary ,they are taxable for specified employees only as shown below


Perquisites Taxable for Specified Employees - Taxability of Perquisites

Note 1 :-

Specified Employee means



Employee having substantial interest

(20% or more voting power)   Having beneficial ownership is Important .


Employee having salary greater than Rs.50000/-

Here salary means −

Basic Salary + All Taxable Allowances – Deduction From Salary


Note 2 :-

If Education facility up to Rs 1000/- then exempt . if greater than Rs 1000/- then whole amount  taxable.

For example:- If Education facility is Rs 1100,then whole 1100 taxable (and not balance 100)


Note 3 :-

Only gas water, electricity is taxable , Mobile phone/Telephone is exempt .


Note 4

In all the above cases Cost to the company is taxable .


Note 5

If any amount recovered from the Employee, it is reduced while calculating the taxable amount .    




Basic Salary =20000

Uniform Allowance=2000(Amt spent is 1500 pm)

He Claims the following Bills from Co

  1. Servant Salary=6000 pm
  2. Gas Bill=2000 pm
  3. Telephone Bill=3000 pm
  4. School Fees=900 pm
View Answer



Basic Salary =20000

Uniform Allowance=2000(Amt spent is 1500 pm)

He is provided free servant, Salary paid by Company is 6000

Free Gas Connection at Employee Home,Bill paid by Company=2000 pm

Free Telephone Connection at Employee Home,Bill paid by Company=3000 pm

Free School for Employees Children:-Rs 900

Check Whether Specified Employee.Calculate Income from Salarie s    


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Q2 Solve last question assuming he is a Director

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CA Maninder Singh is a Chartered Accountant for the past 14 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.