VALUE OF RENT FREE ACCOMMONDATION (unfurnished)

GOVERNMENT OTHERS ACCOMMODATION IN

HOTEL

Licence fee determined (i) Owned by employer

by the central govt. or (a)15% of salary if in city of (a) 24% of salary or
state govt. in respect more than 25 lacs popula- (b) actual charges
of the accommodation -tion as per 2001 census; whichever is less.
as reduced by the rent (b)10% of salary if in cities
actually paid by the em- having population exceeding
-ployee. 10 lacs but not exceeding 25
lacs as per 2001 census;
(c) 7.5% of salary in other areas.
(ii) not owned by employer
(a) actual rent or
(b) 15% of salary
whichever is less

VALUE OF FURNISHED HOUSE:- 10% of the cost of the furniture or actual charges (if
taken on rent) + value of rent free unfurnished accommodation.

RENT FREE ACCOMMODATION WILL NOT BE TAXABLE IN THE FOLLOWING

CASES:-

(i) Accommodation in hotel:-

(a) if accommodation is provided for not more than 15 days and,
(b) on the transfer of employee from one place to another

(ii) (a) if house is located in a remote area and;

(b) it is provided to an employee working at a mining site, or on onshore oil explor-
-ation site or a project execution site;
.
(iii) temporary accommodation of 800sq.ft. given at a mining site etc., is not chargeable to
tax if accommodation is located at least 80km. away from the local limits of a
municipality or contonment board.

VALUATION OF MOTOR CAR

Sl. Circumstances Where cubic capacity of Where cubic capacity of
engine does not exceed 1.6 engine exceeds 1.6 litres
No. litres
(1) (2) (3) (4)
(1) Where the motor car is
owned or hired by the
employer and

(a) is used wholly and No value: No value:

exclusively in the
performance of his Provided that the documents Provided that the documents
official duties; specified in clause (B) of this specified in clause (B) of this
sub-rule are maintained by sub-rule are maintained by
the employer. the employer.

(b) is used exclusively Actual amount of Actual amount of

for the private or expenditure incurred by the
personal purposes employer on the running and
of the employee or maintenance of motor car
any member of his during the relevant previous
household and the year including remuneration,
running and if any, paid by the employer
maintenance to the chauffeur as increased
expenses are met by the amount representing
or reimbursed by normal wear and tear of the
the employer; motor car and as reduced by
any amount charged form the
employee for such use.
expenditure incurred by the
employer on the running and
maintenance of motor car
during the relevant previous
year including remuneration,
if any, paid by the employer
to the chauffeur as increased
by the amount representing
normal wear and tear of the
motor car and as reduced by
any amount charged form the
employee for such use.

(c) is used partly in the

performance of
duties and partly
for private or
personal purposes
of his own or any
member of his
household and-

(i) the expenses on

maintenance and Rs. 1,800 (plus Rs. 900, if Rs. 2,400 (plus Rs. 900, if
running are met or chauffeur is also provided to chauffeur is also provided to
reimbursed by the run the motor car) run the motor car)
employer;
 (ii) the expenses
on running and
maintenance Rs. 600 (plus Rs.900, if Rs. 900 (plus Rs. 900, if
for private or chauffeur is also provided by chauffeur is also provided to
personal use the employer to run the run the motor car)
are fully met by motor car)
the assessee.
(2) Where the employee
owns a motor car but
the actual running and
maintenance charges
(including
remuneration of the
chauffeur, if any) are
met or reimbursed to
him by the employer
and-

(i)such reimbursement
is for the use of the No value: No value:
vehicle wholly and
exclusively for official Provided that the documents Provided that the documents
purposes; specified in clause (B) of this specified in clause (B) of this
sub-rule are maintained by sub-rule are maintained by
the employer. the employer.

(ii) Such reimbursement Subject to the provisions of Subject to the provisions of

is for the use of the clause (B) of this sub-rule, clause (B) of this sub-rule,
vehicle partly for the actual amount of the actual amount of
official purposes and expenditure incurred by the expenditure incurred by the
partly for personal or employer as reduced by the employer as reduced by the
private purposes of the amount specified in Sl. No. amount specified in Sl. No.
employee or any (1)(c)(i) above. (1)(c)(i) above
member of his
household.

(3) Where the employee

owns any other
automotive conveyance
but the actual running
and maintenance
charges are met or
reimbursed to him by
the employer and
 (i)such reimbursement No value:
is for the use of the
vehicle wholly and Provided that the documents
exclusively for official specified in clause (B) of this
purposes; sub-rule are maintained by
the employer.
(ii) such reimbursement Not applicable.
is for the use of vehicle Subject to the provisions of
partly for official clause (B) of this sub-rule,
purposes and partly for the actual amount of
personal or private expenditure incurred by the
purposes of the employer as reduced by the
employee. amount of Rs. 900.

(B) Where the employer or the employee claims that the motor-car is used wholly and
exclusively in the performance of official duty or that the actual expenses on the running and
maintenance of the motor-car owned by the employee for official purposes is more than the
amounts deductible in Sl. No. 2(ii) or 3(ii) of Table II, he may claim a higher amount attributable
to such official use and the value of perquisite in such a case shall be the actual amount
attributable to official use of the vehicle provided that the following conditions are fulfilled:-

(a) the employer has maintained complete details of journey undertaken for official
purpose which may include date of journey, destination, mileage, and the amount of
expenditure incurred thereon;

(b) the employer gives a certificate to the effect that the expenditure was incurred
wholly and exclusively for the performance of official duties.

Explanation.- For the purposes of this sub-rule, the normal wear and tear of a motor-car shall be
taken at 10% per annum of the actual cost of the motor-car or cars.

CONCESSIONAL HOUSE

CONCESIONAL HOUSE:- If any amount is recovered from the employee, then such amount
shall be reduced from the value determined for such house.

SERVICE OF A SWEEPER ETC.

Service of a sweeper, gardener, a watchmen, or a personal attendant provided by an employer to
an employee without charge.
Valuation:- actual cost to the employer (if any amount recovered from the employee then that
amount will be deducted from it).
 SUPPLY OF GAS, ELECTRICITY, AND WATER

In case of supply of gas, electricity, and water for employee’s household consumption, the value
of the benefit to the employee will be:-
(a) amount paid by the employer or
(b) manufacturing cost per unit incurred by the employer (as the case may be)
If any amount recovered from the employee then that amount will be deducted from it.

CHILDREN EDUCATION

education facility is owned and maintained by the employer or

free education is provided in any other institution by the reason of employee being in
employment of that employer.

Valuation:- The value shall be fees charged by a similar school in a similar locality.

However, nothing shall be taxable if value per child does not exceed Rs 1000 pm.

PERSONAL OR PRIVATE JOURNEY FREE OF COST OR AT CONCESSIONAL

FARE

Condition:

a. Employer who is engaged in the carriage of passengers or goods,

b. to any employee or to any member of his household
c. for personal or private journey free of cost or at concessional fare,
d. in any conveyance owned, leased or made available by any other arrangement by such
employer.

Valuation:- Value at which such benefit or amenity is offered by such employer to the public
as reduced by the amount, if any, paid by or recovered from the employee for such benefit or
amenity:

Provided that nothing contained in this sub-rule shall apply to the employees of an airline or the
railways.

VALUE OF INTEREST FREE LOAN

Value:-
(a) any type of loan,
(b) rate charged by SBI on 1st April of relevant previous year for similar loan
(c) interest shall be calculated on the maximum outstanding monthly balance,
However, nothing shall be taxable if:-
(a) loan in aggregate do not exceed Rs 20000 or
(b) loan is provided for the treatment of specified diseases.
But if such loan has been reimbursed under any medical insurance scheme, it shall be taxable.

VALUE OF FREE FOOD AND NON ALCOHOLIC BEVERAGES

Valuation :-
Cost to the employer as reduced by the amount, if any, paid or recovered from the employee for
such benefit or amenity.
Not taxable if:-
a. provided during working hours at office or business premises or
b. provided through paid vouchers which are not transferable and usable only at eating
joints, to the extent the value thereof either case does not exceed fifty rupees per meal or
c. tea or snacks provided during working hours or
d. free food and non-alcoholic beverages during working hours provided in a remote area or
an off-shore installation.

VALUE OF ANY GIFT, OR VOUCHER, OR TOKEN

Condition:-

a. any gift, or voucher, or token in lieu of which such gift and

b. received by the employee or by member of his household on ceremonial occasions or
otherwise from the employer.

Valuation:- The sum equal to the amount of such gift.

Provided that where the value of such gift is below five thousand rupees in the aggregate during
the previous year, the value of perquisite shall be taken as nil.

MEMBERSHIP FEES AND ANNUAL FEES

The amount of expenses including membership fees and annual fees incurred by the employee or
any member of his household.

Valuation:- Amount paid or reimbursed by employer shall be taken to be the value of perquisite
chargeable to tax as reduced by the amount, if any paid or recovered from the employee for such
benefit or amenity.

Provided that there shall be no value of such benefit where expenses are incurred wholly and
exclusively for official purposes.

EXPENDITURE INCURRED IN CLUB

 The value of benefit to the employee resulting from the payment or reimbursement by the
employer of any expenditure incurred (including the amount of annual or periodical fee) in a
club by him or by an member of his household.

Valuation:- The actual amount of expenditure incurred or reimbursed by employer. The

amount so determined shall be reduced by the amount, if any paid or recovered from the
employee for such benefit or amenity.

Following shall not be treated as perquisite :-

(a) where the employer has obtained corporate membership of the club, the initial fee
paid for acquiring such corporate membership.

(b) expenditure is incurred wholly and exclusively for business purposes and the
following conditions are fulfilled:-

i. complete details in respect of such expenditure are maintained by the employer

which may, inter alia, include the date of expenditure, the nature of
expenditure and its business expediency;
ii. the employer gives a certificate for such expenditure to the effect that the same
was incurred wholly and exclusively for the performance of official duties.

USE OF MOVABLE ASSETS

In the case of use of movable assets by employee or any member of his household the value for
taxable amount in the hands of employee will be determined as follow:-
(a) use of laptops and computers (nil value is taxable)
(b) other assets (10% p.a. of the actual cost or actual hire charges)

TRANSFER OF MOVABLE ASSETS

In the case of transfer of movable assets by employer to his employee or any member of
employee, the value of the benefit will be:
Actual cost to the employer as reduced by the following percentage for each completed year
during the asset was put to use by the employer:-
(a) computer and electronic items 50% on the basis of WDV
(b) motor car 20% on the basis of WDV
(c) any other assets 10% on the basis of SLM