Layman’s Guide for Valuation of Perks – Part III


Perks:

Service of sweeper, gardener or watchman or personal attendant: Actual cost to the employer Less: amount paid by the employee

Supply of gas, electricity or water for household consumption: Amount paid to outside agency if procured from outside agency or manufactured cost for actual usage of units Less amount paid by the employee

Education facilities to the members of the employee:

Free education to children in the school maintained by employer or sponsored by employer …Up to Rs.1000 per child per month is exempted. Other schools…. Actual cost to employer Less amount paid by the employee

Loans to employees at concessional interest or no interest rate: Interest charged by employer is equal to more than SBI rate: No perks.

In other cases: The difference of interest amount Less amount paid by the employee towards interest.

Note: Loan not exceeding Rs.20000 in aggregate will not be considered for this clause.

Medical Loan for treatment of diseases specified in Rule 3 A will not be considered for this clause.

Free meals during office hours: Free meals in remote area or offshore installation area is not a taxable perk.

In other places, actual cost to the employer. But rebate is there up to Rs.50 per meal or tea or snacks. Tea or non-alcoholic beverages and snacks in the form of light refreshments during working hours is not taxable.

Value of any Gift: Value of gift is taxable more than Rs.5000 in aggregate in a year.

Expenditure on club other than health club or sports: If the expenditure is incurred by the employer for exclusively for official purposes, it is not a perk and not taxable. Otherwise, it is taxable Less amount recovered from employee.

Any other benefit or amenities or service etc. provided by employer other than telephone /mobile services: The actual cost to employer Less amount recovered from employee.

C R Venkata Ramani

AICWA

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