OTHER PERQUISITES

   

As per the provisions of Section 17 (2)(iv) Any amount paid by the employer in respect of any obligation which otherwise would have been payable by the employee itself would be taken as taxable in all cases. Broadly they can be defined under following two categories:

  • Any Sum Paid by the Employer in meeting the Monetary Obligation of the Employee, e.g., School fees of Children, Servant's salary, Sweeper/ Gardener's salary etc.

  • Any Sum payable by the employer whether directly or through a fund to effect Life assurance/ Contract of annuity on assessee

Let's take a look at the following examples for gaining better clarity on above provision:

  • Mrs. X (a non specified employee) engages a maid servant on a monthly salary of Rs. 3,000/-. However the employer of Mrs. X directly pays the salary to the maid servant in which case it would be taxable in hands of Mrs. X irrespective of the fact that she is a specified or a non specified employee.

  • Considering the facts of the above case if the salary is paid by Mrs. X and reimbursement is claimed by Mrs. X from her employer, then also the perquisite value amounting to Rs. 3000/- per month would be chargeable to tax in the hands of Mrs. X.

  • Take another example where Mrs. X has a gas connection in her name, the bills of which are paid (or reimbursed) by her employer, in which case the amount of bill(s) paid by Mrs. X's employer shall be the taxable value of perquisite in hands of Mrs. X.

PLEASE NOTE:

  • In all the above illustrations the services are engaged by the employee itself and the bills are either directly paid or reimbursed by the employer for same, in which case as per the provisions of the Section 17 (2)(iv) the cost to the employer will be taken as the perquisite value in hands of the employee, irrespective of the fact that such employee is a specified employee or not.