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
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
- Servant Salary=6000 pm
- Gas Bill=2000 pm
- Telephone Bill=3000 pm
- School Fees=900 pm
View answer
|
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 |
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
View answer
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 |
Q2 Solve last question assuming he is a Director
View answer
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 |