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This provison covers  5 perquisites which can be either

Monetary (Reimbursement or claim)

or

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

Director

         Or

Employee having substantial interest

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

Or

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 .    

 


MONETARY PERQUISITES EXAMPLE

Q1

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

-a-

PARTICULARS

AMT RECD

EXEMPT

TAXABLE

 

Basic Salary

20000

 

20000

 

Uniform Allowance

2000

1500

500

 

Servant Salary Reimbursement

6000

0

6000

 

Gas Bill Reimbursement

2000

0

2000

 

Telephone Bill Reimbursement

3000

3000

0

(FULLY EXEMPT)

School Fees Reimbursement

900

900

0

(Exempt upto 1000)

TOTAL

33900

5400

28500

 
         

MOTHLY TAXABLE SALARY

   

28500

 
         

INCOME FROM SALARIES

   

342000

 

 

-ea-

NON-MONETARY PERQUISITES EXAMPLE

Q1

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    

 

-a-

Salary for Specified Employees=

Basic Salary + All Taxable Allowances – Deduction From Salary

=20000+500-0

=20500

Since his salary is less than 50000 he is not specified employee

It is assumed he is not director of co or has substantial interest

 

Taxability

Since he is not specified employee,all these perquisites are exempt

PARTICULARS

AMT RECD

EXEMPT

TAXABLE

Basic Salary

20000

 

20000

Uniform Allowance

2000

1500

500

Free Servant Facility

6000

6000

0

Free Gas facility

2000

2000

0

Free Telephone  facility

3000

3000

0

Free School facility

900

900

0

TOTAL

33900

13400

20500

       

MOTHLY TAXABLE SALARY

   

20500

       

INCOME FROM SALARIES

   

246000

-ea-

 

Q2 Solve last question assuming he is a Director

-a-

Since he is a director,he is a specified employee

Hence these perquisites become taxable

 

PARTICULARS

AMT RECD

EXEMPT

TAXABLE

 

Basic Salary

20000

 

20000

 

Uniform Allowance

2000

1500

500

 

Free Servant Facility

6000

0

6000

 

Free Gas facility

2000

0

2000

 

Free Telephone  facility

3000

3000

0

(FULLY EXEMPT)

Free School facility

900

900

0

(Exempt upto 1000)

TOTAL

33900

5400

28500

 
         

MOTHLY TAXABLE PERQUISITE

   

28500

 
         

ANNUAL TAXABLE PERQUISITE

   

342000

 

-ea-

  1. Income Tax
  2. Income from Salaries
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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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