Tax presentation salaries part 2

Taxation of Salaries - 2
Section 15 to 17
Vikram Singh Sankhala

Retrenchment compensation
• The least of the following is exempt
– Amount determined under the industrial dispute
act
– Actual amount received
– Rs 500,000

Retrenchment Compensation in accordance with a scheme
approved by the Central Government
• Where the retrenchment compensation is received
in accordance with any scheme approved by the
Central Government, the entire amount of the
retrenchment compensation will be exempt under
Section 10(10)B

Question
• Mr.Clever was retrenched from service of
UGLY Ltd.
• The scheme of retrenchment is approved by
the Central Government.
• Retrenchment compensation received Rs.8
lakhs.
• What is the taxability?

Answer
• When retrenchment compensation is received
in accordance with any scheme, which is
approved by the Central Government, it is
fully exempted from tax.

Question 9
• Mr.Flemming was retrenched from service of
“GO SLOW Ltd”.
• Retrenchment compensation received
Rs.6,00,000.
• Amount determined under the Industrial
Disputes Act, 1948 Rs.4,75,000.
• What is the taxability?

Answer 9
• Taxable Value 1,25,000

Computation of Taxable Retrenchment Compensation
• Particulars
• Amount received as Retrenchment Compensation 6,00,000
• Less: Exemption u/s 10(10B): Least of the followings:
• (i) Actual amount received 6,00,000
• (ii) Amount determined under the Industrial 4,75,000
• Disputes Act, 1948
• (iii) Maximum Limit 5,00,000
• Least is Rs 4,75,000
• Taxable Value 1,25,000(6,00,000-4,75,000)

VRS (Voluntary Retirement)
• It is exempt up to Rs 500,000 if VRS is as per
prescribed conditions
• It is available to assessee once in a Lifetime.
• The Guidelines are given in Rule 2BA.

Provident Fund
• Provident Fund scheme is a retirement benefit scheme. Under this
scheme, stipulated sum of money is deducted from the employee’s salary
and an equal matching contribution is made by the employer. The
contribution is invested in gilt-edged securities and interest is earned
thereon. Thus the balance of provident fund consist of:
• Employers contribution
• Interest on employers contribution
• Employees contribution
• Interest on employees contribution

Kinds of Provident Fund
• Employees provident fund can be divided into three
• Statutory Provident Fund:
• It is set up under the provisions of Provident Fund Act, 1925. This fund is
maintained by the Government, semi government organization, local
authority, railway, university and recognized educational institutions.
• Recognized Provident Fund:
• Generally the Employee's Provident Fund & Miscellaneous Provisions Act,
1952, applies to Recognised PF.
• This fund is recognized by the commissioner of Income Tax.
• Unrecognized Provident Fund:
• If the commissioner of Income Tax does not recognize a provident fund
then it will be under the category of unrecognized provident fund.

Taxability of contribution to
Provident fund
Statutory
provident
Fund
Recognized Provident Fund Unrecognized
Provident Fund
Employers
contribution to
provident fund
Exempt from
tax
Exempt upto12% of salary.
Excess is taxable
Exempt from tax
Deductions u/s
80C on
employees
contribution
Available Available Not Available
Interest credited
to provident fund
Exempt from
tax
Exempt from tax up to
9.5%; excess of interest
over this is taxable
Exempt from tax

Lump sum payment at the time of retirement
Statutory
provident Fund
Recognized Provident
Fund
Unrecognized Provident
Fund
Lump sum
payment
at the time
of
retirement
Exempt from tax Exempt from tax in
some cases.
See Note in next slide
1. Employees contribution
exempt
2. Interest on employee
contribution taxable
under income from
other sources
3. Employer’s
contribution and
interest thereon is
taxable under the head
income form salaries.

Note
– Salary includes basic salary, dearness allowance/ dearness pay, if terms of
employment so provide and commission if received as fixed percentage of
turnover achieved by employee.
– The accumulated balance due and becoming payable to an employee
participating in a recognized provident fund will be excluded from his total
Income in the following cases:
• If he has rendered continuous service with his employer for a period of 5
years or more.
• If the employee is not able to fulfill the conditions of such continues
service due to his service having been terminate by reason of his ill health
or by reason of the contraction or discontinuance of the employers
business or any other reason beyond the control of assessee.
• If on the occasion of his retirement, the employee obtains employment,
to the extent the accumulated balance due is transferred to another
recognized provident fund maintained by such employer.

Unrecognized Provident Fund (Maturity Benefit)
Maturity Benefit (URPF)
Employer
Contribution
Interest on
Employer
Contribution
Employee
Contribution
Interest on
Employee
Contribution
Taxable under head Salary As
“Profit in Lieu of Salary”
Not Taxable Taxable Under head
“Other Sources”

Superannuation
• a) Superannuation Fund is a scheme of retirement benefits for the employee.
• b) These are funds usually established under trusts by an undertaking.
• c) The Company pays a upto 15% of basic wages as superannuation contribution.
• d) The contribution is invested by the Fund in various securities as per
investment pattern prescribed.
• e)Income earned on these investments shall be exempt, if any such fund is an approved
superannuation fund.
• f) Interest on contributions is credited to the members account.
• g)Normally the rate of interest is equivalent to the PF interest rate.
• h)In the case of resignation of the employee, the employee has the
option to transfer his amount to the new employer. If the new
employer does not have a Superannuation scheme, then the employee
can withdraw the amount in the account, subject to deduction of tax
and approval of IT department, or retain the amount in the Fund, till
the superannuation age.

Superannuation schemes can be of two types:
• Defined Benefit (DB):
This defines the amount of benefit that an employee receives at retirement. Actuarial
valuation is conducted to determine the funding rate. A pooled fund is maintained for all
members of the scheme.
Upon retirement of a member, the amount required to secure the benefit is drawn from the
pooled fund. The pooled fund should achieve the required funding level to enable the
employer to meet the benefit obligations.
• Defined Contribution (DC):
This defines the annual contribution that the employer will deposit into the scheme for each
employee. Contributions are usually fixed as a percentage of the employees’ salary.
Individual employee accounts reflecting the contributions and the interest accumulations are
maintained. Upon retirement, the individual account is released to provide funds to secure
the benefits under the scheme.

Approved Superannuation fund
• Means a superannuation fund which has been and
continues to be approved by the Chief Commissioner
or Commissioner of Income Tax in accordance with
Rule 2 and Rule 3 contained in part B of the fourth
schedule of the Income Tax Act.

• Tax Benefits in case of approved
superannuation funds

For the Employee
• The employee's contribution in the case of Contributory scheme is
allowed as a deduction under Section 80C of the Income-Tax Act.
• As per Section 17(2) (v) the contributions paid by the employer are not
treated as perquisites in the hands of the employee concerned.
• As per Section 10(25) (iii) of the Income-Tax Act, the income from the
fund is exempt from tax.
• Pension/annuity to member is taxable under Section Sec 17(1) (ii)
• Under Section 10(13) of the Income-Tax Act, the benefits received are tax
free in case of:
– Death of the beneficiary
– Commuted value paid on retirement
• Amount received from superannuation fund on resignation before a
specified age is not eligible under Section 10(13).
• Payment on Resignation is exempt only if it is after the specified age in the
superannuation fund scheme/rules.

For the Employer
• Annual contributions of up to 27 per cent
(inclusive of the 12 per cent contribution
made towards the provident fund) of the basic
salary by the employer are treated as
deductible business expense as per Section
36(1) (iv) of the Income Tax Act.

PERQUISITES [U/S 17(2)]
• The term ‘perquisite’ is any casual
emolument, fees or profit attached to an
office or position in addition to salary or
wages.

PERQUISITES [U/S 17(2)]
• The definition of Perquisites in the Income Tax Act, is
contained in Section 17(2) and is an inclusive definition.
• It lists out 6 categories that would be included in the
definition of the term perquisite.
• The categories are from Section 17(2)(i) to Section 17(2)(vi).
• The third category i.e Section 17(2)(iii) is only applicable in
the case of specified employees.
• The term ‘Specified Employee’ is defined in Section 17(2)(iii)

Taxability of Perquisites
• For Income Tax purposes, perquisites may be
divided into three categories. These are:
1. Perquisites which are taxable in the hands of all
categories of employees.
2. Perquisites which are taxable only when the
employee belongs to a specified category.
3. Tax free Perquisites

• Perquisites which are taxable in the hands of
all employees.

Rent free Accommodation -17(2)(i)
• Rent free accommodation provided by the
employer to the Employee.
• Such accommodation may be furnished or
unfurnished.

Rent Concession - 17(2)(ii)
• Any concession in the matter of Rent in
respect of the accommodation provided or
granted by the employer to the employee.

Discharging Monetary Obligation
-17(2)(iv)
• Any sum paid by the employer in discharging
the monetary obligation of the employee
which would otherwise have been payable by
the employee eg. The school fees of the
children of the employee paid by the
employer or the Income Tax of the employee
paid by the Employer.

Life assurance or annuity -17(2)(v)
• Any sum payable by the employer whether
directly or through a fund (other than
recognized provident fund, approved
superannuation fund or Deposit linked
Insurance fund) to effect an assurance on the
life of the assessee or to effect a contract for
an annuity.

Any other amenity -17(2)(vi)
• The value of any other fringe benefit or
amenity (excluding the Fringe Benefits
chargeable to tax ) as may be prescribed.

For Specified Employees -17(2)(iii)
• Perquisites which are taxable only when the
employee belongs to a specified category

Specified Employee under Section
17(2)(iii)
• Employee is specified employee if he falls
under any 1 of the following 3 categories:
1 He is a director of the company and is also an employee
of company
2 He is an employee with substantial interest in the
company i.e. he holds 20% or more of the voting power.
3 His income under the head “salaries” excluding non
monetary perquisites exceeds Rs.50,000.

Monetary Obligations discharged by the
Employer
• If a watchman is engaged by the employee
and his wages are either paid or reimbursed
by the employer, such facility is a monetary
obligation of the employee discharged by the
employer.
• Such perquisites are taxable in the hands of all
employees.

For Specified employees
• If the watchman is engaged by the employer
and the facility is provided to the employee,
such perquisite is taxable only in the hands of
specified Employees.

Examples of such facilities
• Provision of services of a sweeper, gardener etc.
• Supply of gas, electricity or water for Household
consumption.
• Provision of free or Concessional educational
facilities for any member of the employee’s
household.
• Provision of interest free or concessional loan.
• Benefit arising from the use of any movable asset.

1. Loans to Employees Rule 3(7)(i)
• No value would be charged if such loans are
made available for medical treatment in
respect of diseases specified in rule 3A of
these Rules
• or where the amount of loans are petty not
exceeding in the aggregate Rs. 20,000

2. Food and Beverages provided to Employees
Rule 3(7)(iii)
• Free food and non-alcoholic beverages provided by such
employer during working hours at office or business premises
• or through paid vouchers which are not transferable and
usable only at eating joints,
• to the extent the value thereof in either case does not exceed
Rs. 50 per meal
• or to tea or snacks provided during working hours
• or to free food and non-alcoholic beverages during working
hours provided in a remote area or an off-shore installation.

3.Gift to Employees under Rs 5,000 Rule 3(7)(iv)
• Where the value of such gift, voucher or
token, as the case may be, is below Rs. 5,000
in the aggregate during the previous year, the
value of perquisite shall be taken as nil.

4.Use of Laptops and Computers
Rule 3(7)(vii)
• The value of benefit to the employee resulting from the use by the
employee or any member of his household of laptops and computers
belonging to the employer or hired by him.
• However in case of transfer of laptops and computers belonging to the
employer, the value of benefit to the employee shall be the amount
representing the actual cost of such asset to the employer as reduced by
the cost of normal wear and tear calculated at the rate of 50%
(Computers and Electronic items) by the reducing balance method..
• in the case of computers and electronic items, the normal wear and tear
would be calculated at the rate of 50% and in the case of motor cars at
the rate of 20% by the reducing balance method.
• The rate of depreciation in case of transfer of transfer of other assets
would be 10% by the reducing balance method.

5. Education Facility Rule 3(5)
• Where the educational institution itself is maintained and
owned by the employer
• and free educational facilities are provided to the children of
the employee
• or where such free educational facilities are provided in any
institution by reason of his being in employment of that
employer,
• if the cost of such education or the value of such benefit per
child does not exceed Rs. 1,000 p.m.

6.Perquisites provided outside India
Section 10(7)
• Perquisites provided by the Government of
India, to its employees, who are citizens of
India for rendering services outside India, are
not taxable.

7. Medical Treatment
Proviso (1) to Section 17(2)
• Any medical treatment provided to an
employee or any member of his family in any
hospital maintained by the employer

• ii) any sum paid by the employer in respect of any expenditure actually incurred by
the employee on his medical treatment or treatment of any member of his family
—
• (a) in any hospital maintained by the Government or any local authority
or any other hospital approved by the Government for the purposes of medical
treatment of its employees;
• (b) in respect of the prescribed diseases or ailments, in any hospital
approved by the Chief Commissioner having regard to the prescribed guidelines :
• Provided that, in a case falling in subclause (b), the employee shall attach with
his return of income a certificate from the hospital specifying the disease or
ailment for which medical treatment was required and the receipt for the amount
paid to the hospital;]

7. Health Insurance Premium paid by the Employer
• (iii) any portion of the premium paid by an
employer in relation to an employee,
• to effect or to keep in force an insurance on
the health of such employee
• under any scheme approved by
• the Central Government
• [or the Insurance Regulatory and Development
Authority]

7. Health Insurance Premium reimbursed by the
Employer Proviso (4) to Section 17(2)
• (iv) any sum paid by the employer in respect of any
premium paid by the employee
• to effect or to keep in force an insurance on his
health or the health of any member of his family
• under any scheme
• approved by the Central Government
• [or the Insurance Regulatory and Development
Authority]

• (v) any sum paid by the employer in respect of any
expenditure actually incurred by the employee
• on his medical treatment or treatment of any
member of his family
• [other than the treatment referred to in clauses (i)
and (ii)];
• so, however, that such sum does not exceed [fifteen]
thousand rupees in the previous year.

• (vi) any expenditure incurred by the employer on—
• (1) medical treatment of the employee, or any member of the family of
such employee, outside India;
• (2) travel 21
[and] stay abroad of the employee or any member of the
family of such employee for medical treatment;
• (3) travel and stay abroad of one attendant who accompanies the patient
in connection with such treatment,
• 22
[subject to the condition that—
• (A) the expenditure on medical treatment and stay abroad shall be
excluded from perquisite only to the extent permitted by the Reserve Bank of
India; and
• (B) the expenditure on travel shall be excluded from perquisite only in
the case of an employee whose gross total income, as computed before including
therein the said expenditure, does not exceed two lakh rupees;]

Foreign Medical Facility
• Expenditure incurred by the Employer on medical treatment
outside the country, of the employee or any member of the
employee shall be excluded to the extent it is permitted by
the Reserve Bank of India.
• However the cost of travel of the employee/ any member of
his family and his one attendant shall be excluded only for
those employee whose gross total income excluding such
traveling expenditure does not exceed Rs. 200,000/.

8. Employer’s Contribution
• Contribution of employers to employee's
pension, superannuation fund, provident
fund, Health Insurance Scheme.

9. Motorcar and Conveyance facility
Explanation to Section 17(2)(iii)
• Use of any vehicle
• provided by a company or an employer
• for journey by the assessee from his residence to his
office or other place of work,
• or from such office or place to his residence,
• shall not be regarded as a benefit or amenity granted
or provided to him free of cost or at concessional
rate

10. Hotel Accommodation
Explanation 1(d) to Section 17(2)(ii)
• Hotel accommodation up to 15 days on
transfer.

11. Accommodation in 'remote area'
• Accommodation provided in a 'remote area'
– to an employee working at a mining site
– or an onshore oil exploration site,
– or a project execution site
– or an accommodation provided in an offshore site
of similar nature.

12. Judges of Supreme Court/High Court
• Rent free official Residence and Conveyance
Facilities provided to judges of High Court or
Supreme Court is not a taxable perquisite.

13. Officers of Parliament
• Rent free furnished Residence (including
maintenance thereof) provided to an officer
of the parliament, a Union Minister or Leader
of the opposition in Parliament, is not a
Taxable Perquisite.

Meaning of ‘Salary’
• For the purposes of Valuation of Perquisites, ‘Salary’ includes
the pay, allowances, bonus or commission payable monthly
or otherwise or any monetary payment, by whatever name
called, from one or more employers, but does not include:
– Dearness Allowance or Dearness pay unless it enters into the
computation of superannuation or Retirement Benefits of the
employee concerned.
– Employer’s contribution to the Provident Fund account of the
Employee.
– Allowances which are exempt from the payment of Tax.
– Value of Perquisites

Valuation of rent-free unfurnished
accommodation

Central and State Government Employees
• The value of such accommodation provided to
Central and State Government employee
• is equal to the license fee,
• which would have been determined by the
central or state government.

Valuation of Rent Free Unfurnished Accommodation
(private sector)
Population of city as
per 2001 census
where
accommodation is
provided
Where the accommodation is
owned by the employer
Where the accommodation is
taken on lease or rent by the
employer
Exceeding 25 lakhs 15% of salary in respect of the
period for which the
accommodation is occupied by
the employee
Lower of amount of lease
rent paid/ payable or 15% of
the salary
Exceeding 10 Lakhs
but not exceeding
25 lakhs
10% of salary in respect of the
the employee
the salary
Any other 7.5% of salary in respect of the
the employee
the salary

Exception to accomodation rules
• It is not applicable to an accomodation
located in a remote area( 40 kms from town)
and in a mining, project ,oil exploration site
• Where on account of transfer, an employee is
given two accomodation , only one will be
taxed for 90 days. (the lesser of the two will
be taxed till 90 days). Beyond that both will be
taxed)

• Valuation of rent-free furnished
accommodation

Accommodation is not in a hotel
• Find out the value of the perquisite on the
assumption that the accommodation is
unfurnished.
• Valuation of furniture is done:
– 10% per annum of the original cost of the
furniture if the furniture is owned by the
employer
– actual hire charges payable, if furniture is hired by
the employer.

Accommodation in a hotel
• The perquisite is valued at the lower of the
two amounts:
– 24% of salary paid or payable for the period
during which such accommodation is provided in
the previous year.
– Actual charges paid or payable by the employer to
the hotel.

Accomodation at a concessional value
Value is determined as follows:
• Find out the value of accomodation as if it is
not provided at a concession
• Deduct the value of rent charged from the
employee

Question 11
• Mr. Kushal submits the following information regarding his salary income which he
gets from ABC Ltd.
• Basic salary Rs.15,000 pm;
• D.A. 40% of basic salary( forming part of retirementbenefits);
• City Compensatory Allowance Rs.300pm; Children Education Allowance Rs.400pm(
for 3 children); Transport allowance Rs.1,000 p.m.;
• He is also entitled to HRA of Rs.6,000 p.m. from 1.4.2008 to 31.8.2008. He was
paying a rent of Rs.7,000 p.m. for a house in Delhi. From 1.9.2008 he was provided
with an accommodation by the company for which the company was paying the
rent of Rs.5,000 pm. The company charged him Rs.1,000 pm as rent for the
accommodation.
• Compute gross salary for the a.y.200910.

Answer 11
• Total Income from Salary = 2,99,575

Computation of Income from Salary
• Particulars
• Basic salary 15,000 x 12 = 1,80,000
• D.A. (40% of 1,80,000) = 72,000
• City Compensatory Allowance (fully taxable) (300 x 12) = 3,600
• House Rent Allowance = (April to August 2008)
• Actual amount received ( 6,000 x 5) = 30,000
• Less: Exemption u/s 10(13A) Rule 2A, Least of the followings:
• (a) Actual amount received 30,000
• (b) 50% of salary 52,500
• (c) Rent paid – 10% of Salary
• [ 7,000 x 5 – 10% of 1,05,000] = 24,500
• Least of these is =24,500
• Taxable Amount = 5,500

Note
• Salary for HRA (5 months)
• Basic salary : 15,000 x 5 = 75,000
• D.A. = 40% of 75,000 = 30,000
• Total = 1,05,000
• Children Education Allowance Actual amount received (400 x 12 x 3) = 14,400
• Less: Exemption u/s 10(14) @ Rs.100 per month per child subject to a maximum of
2 children (100 x 12 x 2) = 2,400
• Taxable = 12,000
• Transport Allowance
• Actual amount received ( 1,000 x 12) = 12,000
• Less: Exemption u/s 10(14) @ Rs.800 p.m. (800 x 12) = 9,600
• Taxable = 2,400
• Gross Income from Salary u/s 17(1) = 2,75,500(1,80,000+ 72,000+ 3,600+ 5,500+
12,000+ 2,400)

• Add: Value of Unfurnished accommodation u/s 17(2) rule 3(1) explanation 1
• Assuming Population exceeding 25 lakhs (as accommodation provided in a Metro
city)
• 15% of salary for 7 months (September 2008 to March 2009)
• Salary = Basic pay + DA (forming part of retirement benefits) +
• all other taxable allowances
• = [(15,000 × 7) + (40% of 1,05,000) + (300 × 9)+ {(400×9×3) –
• (100 × 9 × 2)}+ {(1000 – 800) × 9}]= 1,60,500
• Perquisite = 24,075
• Total Income from Salary = 2,99,575 (2,75,500+ 24,075)

Question 12
• Mr.Sambhu was provided an accommodation in a hotel by his
employer for 22 days before providing him a rent free
accommodation which is owned by the employer.
• The hotel charges paid Rs.6,000.
• Salary for the purpose of accommodation for the period of 22
days is Rs.11,000.
• His employer has charged Mr. Sambhu Rs 1000/ for the
accommodation.
• Compute the value of accommodation.

Answer 12
• Taxable value of perquisite 1,640

Computation
• In case of accommodation provided to the assessee on account of
transfer, which is exceeding 15 days cumulatively, such shall be taxable as
a perquisite.
• The company recovered Rs.1,000 from the employee.
• Compute taxability.
• Lower of the following:
• (i) 24% of salary paid/payable= 24% of 11,000 = 2,640
• (ii) Actual charges paid/payable = 6,000
• Least is 2,640
• Less Amount paid or payable by the employee 1,000
• Taxable value of perquisite 1,640

Question 13
• Value of unfurnished accommodation (computed)
Rs.50,000.
• Cost of furniture provided by the employer
Rs.80,000.
• Hire charges of furniture provided in the
accommodation Rs.500 p.m.
• Amount recovered from employee Rs.200 p.m.

Answer 13
• Value of Furnished Accomodation = 61,600

Computation
• Value of Furnished Accomodation (provided at Concessional
rates)
• Particulars
• Value of unfurnished accommodation as above 50,000
• Add: Value of Furniture provided:
• • 10%p.a. of original cost of such furniture 8,000
• • If hired from third party, then Actual hire charges 6,000
• Less: Any charges paid or payable by the employee (200 x 12)
=(2,400)
• Value of Furnished Accomodation = 61,600(50,000+ 8,000+
6,000 - 2,400)

Question 14
• Mr.Ritesh is provided with an accommodation in Kolkata since April 2008.
• Salary Rs.40,000 p.m.
• Cost of furniture provided Rs.80,000.
• On 1st September, 2008, following a promotion with a increase in Salary
by Rs.15,000,
• he was transferred to Jharkhand (population less than 25 lakhs but more
than 10 lakhs),
• and was also provided an accommodation there.
• Mr.Ritesh was allowed to retain the Kolkata accommodation till March,
2009.

Answer 14
• Total Value of Taxable Perquisite 1,25,750

Computation
• Phase 1: Value of Furnished Accommodation
(Kolkata) (April to September 2008)
• Value of unfurnished accommodation (15% of
40,000 × 6 months) 36,000
• Add: Value of Furniture provided:
• @10%p.a. of original cost of such furniture
• (10% of 80,000 x 6 months) 8.000
• Value of Furnished Accommodation 44,000

Phase 2 and 3
• Phase 2: Valuation of accommodation (October 2008 to December 2008)
• (a) For the first 90 days of transfer: Where accommodation is provided
both at existing place of work and in new place, the accommodation,
which has lower value, shall be taxable.
• Phase 3:
• (b) After 90 days: Both accommodations shall be taxable.
• Computation for the first 90 days of transfer: (October 2008 to December
2008)
• Lower of:
• (i) Value of accommodation at existing place of work
• (ii) Value of accommodation at new place

Phase 2 – Lower Taxable
• Value of accommodation at existing place of work (Kolkata)
• 15% of salary for 3 months (i.e. 90 days) = 15% of 55,000 x 3
months =24,750
• Add: Cost of furniture provided: 10% of 80,000 x 3 months
=24,000
• Total Value of Perquisite 48,750
• Value of accommodation at new work place(Jharkhand)
• 10% of salary for 3 months (i.e. 90 days) = 10% of 55,000 x 3
months = 16,500
• Therefore, the assessee shall be assessed to tax on Rs.16,500
(being the lower)

Phase 3- Both Taxable
• Phase 3: Valuation of accommodation (after 90 days) (January
2009 to March 2009)
• For Kolkata accommodation: 15% of 55,000 x 3 months =
Rs.24,750
• Add: Cost of furniture provided: 10% x 80,000 x 3 months =
Rs.24,000
• Total value of perquisite Rs.48,750
• For Jharkhand accommodation: 10% of 55,000 x 3 months =
Rs.16,500
• Total = Rs.48,750+ Rs.16,500 = Rs 65,250

Total Value of Taxable Perquisite
• Total value of perquisite:
• Particulars Taxable value of
• perquisite
• Phase 1: Accomodation in Kolkata 44,000
• Phase 2: Accomodation in Jharkhand (being the lower during
90 days) 16,500
• Phase 3: Accomodation in Kolkata 48,750
• Phase 3: Accomodation in Jharkhand 16,500
• Total Value of Taxable Perquisite 1,25,750
• (44,000+16,500+48,750+16,500)

Perquisite of Motor Car
Perquisite in respect of motor car is taxable only when
the employer is not liable to fringe benefit tax (like
sole proprietor, charitable institutions, etc) Private
company employees will not pay any tax.
• 1.Car is owned by Employee
• 2. Car is owned or hired by Employer
a) Expenses met by Employer
b) Expenses met by Employee

Motor car perquisite
• Car owned by Employee
a) Expenses met by Employee - No Tax
b) Expenses met or reimbursed by Employer
- Official purpose only No tax
- Used for private purpose-actual expenses
less recovery taxable
-Partly used for private purpose (cont. next
slide)

Motor car perquisite( Cont.)
Car owned by employee (cont.)
-Partly used for private purpose
1) Find actual expense incurred by employer
2) Less amount used for official purpose
ie.Rs.1200 upto 1.6lts engine capacity &
Rs.1600 above 1.6 lts. Add Rs 600 pm if
Chauffeur is also provided.
3) Balance is the value less if any recovered
from employee

Car owned by employee (cont.)
• However in case the actual expenses on running and
maintenance is more than Rs 1200/1800(upto 1.6 ltrs) or
1600/2200 (above 1.6 ltrs), he can claim such actual amount
of expenditure as deduction by maintaining the following
documents:
– The employer should maintain complete details of journey
undertaken for official purpose which may include date of journey,
destination, mileage and the amount of expenditure incurred thereon.
– The Employer should give a Certificate that the expenditure was
incurred wholly and exclusively for the performance of his official
duty.

2.When Car is owned or hired by
Employer
• A. Expense by employer
a) Used only officially No tax
b) Partly official & partly personal-
-sum of Rs.1200 upto 1.6 ltrs engine capacity
-sum of Rs.1600 beyond 1.6 ltrs capacity
Plus Rs 600 in case Chauffeur is provided by
Employer

Wholly used for personal- all expense paid by
employer
• Actual amount of 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 (which will be 10% of
the cost of motor car)
• and as reduced by any amount charged from the
employee for such use.

2.When Car is owned or hired by
Employer (cont.)
• B. Expense and Maintenance by Employee
a) Wholly used for personal- 10% of cost for wear
and tear
b) Partly official and partly personal-
-sum of Rs.400 upto 1.6 ltrs engine capacity
-sum of Rs.600 beyond 1.6 ltrs capacity
and Rs.600 for chauffeur

Valuation of perquisite in respect of free domestic
servant
• The value of benefit to the employee (or any member of his
household) resulting from the provision by the employer for
services of a
– sweeper,
– a gardener,
– a watchman
– or a personal attendant,
• shall be the actual cost to the employer, that is, the total
amount of the salary paid or payable by the employer (or any
other person on his behalf) for such services as reduced by
the amount paid by the employee for such services.

Valuation of perquisite in respect of gas, electricity or water
provided free of cost
• This perquisite is taxable
• in the hands of specified employees only
• provided the connection is in the name of
employer.
• If in the name of employee
• then the employer would be paying on behalf
of the employee
• and is taxable in all cases.

Valuation
Mode of valuation If purchased from outside If supplied by the
employer from own
sources
Cost to employer (A) Amount paid /payable by
the employer to the
outside agency
Manufacturing cost per
unit incurred by the
employer
Sub: Amount recovered
from the employee (B)
Recovery from the
employee
Recovery from the
employee
Taxable Value of perquisite
(A-B)
Balancing amount Balancing amount

Valuation in respect of free education
• This perquisite is taxable in the hands of a specified
employee only
• and only in those cases where the educational
institute is owned and maintained by the employer
• or where such education facility is provided in any
institute
• by reason of employee’s employment with the
employer.

Where the education facility is provided to employees
children
Different Situations Amount chargeable to tax
Where the cost/ value of benefit does not
exceed Rs. 1000 per child per month
NIL
Where such amount exceeds Rs. 1000/- Cost of education in a similar instituted in
a similar locality – Rs 1000 – amount
recovered by employee

Where education facility is provided to other members
of the household
Different Situations Amount chargeable to tax
Where education facility is provided to
other members of the household
Cost of education in a similar instituted in
a similar locality – amount recovered by
employee

Payment or Reimbursement of Fees
• If the fee is paid by the employer
• for employees children
• then there is no exemption available
– for both specified and non-specified employees.
• Similarly reimbursement of school fees is also
taxable
– in the hands of both specified and non-specified
employees.

Interest on Loans
• The value of the benefit to the assessee
• resulting from the provision of interest-free or concessional loan for any purpose
• made available to the employee or any member of his household during the
relevant previous year
• by the employer or any person on his behalf
• shall be determined as the sum equal to the interest computed
• at the rate charged per annum by the State Bank of India
• as on the 1st day of the relevant previous year in respect of loans for the same
purpose advanced by it
• on the maximum outstanding monthly balance
• as reduced by the interest, if any, actually paid by him or any such member of his
household.

Exceptions
• No value would be charged if such loans are made available
for medical treatment in respect of diseases specified in rule
3A of these Rules
• or where the amount of loans are petty not exceeding in the
aggregate Rs. 20,000.

Valuation in respect of providing use of
movable assets
• The value of benefit to the employee resulting from the use
by the employee (or any member of his household)
• of any movable asset (other than car, computer and laptop)
• belonging to the employer
• shall be determined at 10% per annum of the actual cost of
such asset.
• It is taxable in the hands of all employees i.e. specified and
non specified.
• The taxable amount shall be reduced by the amount, if any,
recovered by the employee.

Mode of Valuation
Perquisite in respect of use
of movable asset
Perquisite in respect of use
of movable asset
Mode of Valuation Owned by employer Taken on hire by employer
A. Find the cost to the
employer
10% p.a of actual cost Amount of rent paid or
payable
B. Amount recovered from
the employee
Recovery from the
employee
Recovery from the
employee
Taxable Value of perquisite
(A-B)
Balancing amount (if
positive)
positive)

Valuation in respect of Transfer of movable Asset
Perquisite in respect of
transfer of movable
asset
transfer of movable
asset
transfer of movable
asset
Mode of Valuation *Electronic Items/
computers
Motor car Any other asset
Find out the cost to the
employer (A)
Actual cost to the
employer
Actual cost to the
employer
Actual cost to the
employer
Normal wear and tear for
completed years for
which the asset was used
by the employer for his
business. (B)
50% for each completed
year by reducing balance
method
year by reducing balance
method
year of actual cost.
Amount recovered by the
employee (C)
Paid by employee for
acquiring such asset
Taxable Value
(A-B-C)
positive)
positive)
positive)
*Note: Electronic Items refer to data storage and handling devices like computer, digital diaries and
printers. They do not include household appliances.

Valuation of Medical Facilities
• Fixed medical Allowance is always chargeable to tax.
• But Medical expenditure reimbursed in excess of Rs. 15,000 is
chargeable to tax.
• The following are the exemptions to the rule that is in the
following cases there is no monetary ceiling:
– In employer hospital
– government hospital
– Expenditure in case of specified treatment
– Health insurance premium
– Medical facilities outside India

Question 15
• Calculate the perquisite value of the expenditure on medical treatment, which is
assessable in the hands of an employee of a company, inclusive of the conditions
to be satisfied:
• Gross total income, inclusive of salary Rs.2,00,000
• (a) amount spent on treatment of the employee’s wife in a hospital maintained by
the employer Rs.20,000
• (b) amount paid by the employer on treatment of the employee’s child in a
hospital Rs.14,000
• (c) medical insurance premium reimbursed by the employer on a policy covering
the employee, his wife and dependent parents Rs.7,000
• (d) (i) amount spent on medical treatment of the employee outside India
Rs.2,50,000(the whole of such expenditure is permitted by RBI)
• (ii) amount spent on travel and stay abroad Rs.90,000
• (e) amount spent on travel and stay abroad of attendant Rs.60,000

Answer 15(a)
• Amount spent on treatment of the
employee’s wife in a hospital maintained by
the employer Rs.20,000
• Nil Fully exempted

Answer 15(b)
• (b) amount paid by the employer on
treatment of the employee’s child in a
hospital Rs.14,000
• Nil Not taxable:
• since the amount = Reimbursement of
expenses incurred is less than Rs.15,000

Answer 15(c)
• (c) medical insurance premium reimbursed by
the employer on a policy covering the
employee, his wife and dependent parents
Rs.7,000
• Nil Not taxable:
• since medical insurance premium paid
premium referred to u/s 80D is paid on the
employee and members of his family

Answer 15(d)
• (d) (i) amount spent on medical treatment of the employee
outside India Rs.2,50,000(the whole of such expenditure is
permitted by RBI)
• (ii) amount spent on travel and stay abroad Rs.90,000
• (e) amount spent on travel and stay abroad of attendant
Rs.60,000
• Medical treatment outside India Nil - the whole of such
expenditure is permitted by RBI
• Amount spent on travel and stay abroad
• Nil Not taxable: as the Gross total income for the employee
does not exceed Rs.2,00,000

Question 16
• Mr.E is employed with N Ltd. he also gets the services of sweeper and
watchman. Determine his gross salary in the following cases:
• 1) His salary is Rs.4,200 pm. Employer provides the services of sweeper
and watchman. He pays them Rs.600 pm and Rs.500pm;
• 2) His salary is Rs.4,200 pm. Sweeper and watchman are engaged by N at
the rates given in clause(1) above but their wages are reimbursed by the
employer;
• 3) His salary is Rs.4,210 pm. Employer provides the services of sweeper
and watchman at the above rates but he recovers from N Rs.200 pm and
Rs.300 pm respectively.
• E has paid employment tax of Rs.400.

Answer 16
• Case (1) Case (2) Case (3)
• [Ref.Sec.17(2)(iv), [Ref.Sec.17(2)(iii)Rule 3(3)]
• Basic Salary 50,400/ 50,400 /50,520
• Wages of sweeper Sec.17(2)(iii) not taxable /7,200/ 4,800
• Wages of watchman Sec.17(2)(iii) not taxable /6,000 /2,400
• Gross salary 50,400/ 63,600/ 57,720
• Salary 50,000/63,200/57,320

Case (1)
• Case (1): He is a non-specified employee. Perquisites
provided by employer u/s 17(2)(iii) are not
• chargeable to tax:
• Salary: 4,200 × 12 = 50,400
• Less: Professional tax paid u/s 16(iii) = 400
• Monetary income not exceeding Rs.50,000 = 50,000
• Hence Gross Salary = Rs 50,400
• Income under the head ‘Salary’ = Rs 50,000.

Case (2)
• Case (2): If the facility is engaged by the employee
but reimbursed by the employer,
• it is an obligation of employee,
• discharged by employer u/s 17(2)(iv),
• it is always taxable.
• 50,400+7200+6000
• = Rs 63,600
• Less Employment Tax 400
• = Rs 63,200

Case (3)
• Case (3): He is a specified employee, as his monetary income,
chargeable under the head “salaries”
• exceeds Rs.50,000.
• Gross salary; 4,210 × 12 = 50,520
• Less: Professional tax paid u/s 16(iii) = 400
• Monetary income exceeding Rs.50,000 Rs.50,120
• 50,520+4800+2400
• =Rs 57,720
• Less Employment Tax 400
• = Rs 57,320

Question 17
• G Ltd. provides electricity to its employee, P. Annual consumption as per
meter reading comes to 2,250 units. Determine the value of the perquisite
in the following cases:
• 1) Electricity meter is in the name of P and the rate of electricity is Rs.3
per unit
• 2) Electricity meter is in the name of G Ltd. the rate of electricity is Rs.3
per unit.
• 3) G Ltd. is a power-generating company. Manufacturing cost is 90 paise
per unit but supplied to public @ Rs.2 per unit. However, it charges 30
paise per unit from employees.
• Monthly salary of P is Rs 5000/-

Solution: With reference to Rule 3(4)
• 1) Perquisite value of free electricity is Rs.6,750
(2,250 x 3 ).
• As the electric meter is in the name of the employee,
it is his obligation to pay the bill.
• However, as the bill has been paid by the employer,
it is an obligation of employee, discharged by the
employer.
• It is always taxable u/s 17(2)(iv).

Case 2
• 2) Perquisite value of free electricity will be
Rs.6,750.
• It shall be assessed to tax,
• since the employee is a specified employee as
per Sec.17(2)(iii) – Annual Salary more than Rs
50,000.

Case 3
• 3) Perquisite value of electricity supplied
• = 2,250 ( 0.90 – 0.30)
• = Rs.1,350

Question 18
• Determine the value of education facility in the following cases:
• 1) Three children of G, an employee of S Ltd., are studying in a school, run
by S Ltd.
• School fees is Rs.2,500 pm and hostel fees is Rs.2,000 pm.
• But the employer recovers only Rs.600 pm and Rs.500 pm respectively.
• However, a similar school or a hostel around the locality charges Rs.1,800
pm and Rs.1,200 pm respectively.
• 2) The employer has also reimbursed the school fees of Rs.1,200 pm of his
nephew, fully dependent on him after the death of his brother.

Answer 18
• Total value of taxable perquisite 75,600

Computation of taxable value of education facility [As per Rule
3(5)]
• Taxable value of perquisite
• 1)(a) School fees of his children, studying in a school run by
employer:
• (Rs.1,800 x 3 x 12) – (1,000 x 3 x 12) – (600 x 3 x 12) 7,200
• (b) Hostel fees: (2,000 x 3 x 12) – (500 x 3 x 12) 54,000
• 2) School fee of nephew (1,200 x 12) 14,400

Question 19
• Mr. Z is the manager of F Ltd. his son is a student of Amity
International School.
• School fees of Rs.4,000 pm and hostel fees of Rs.3,000 pm.,
are directly paid by F Ltd. to the school but it recovers from Z
only 30%.
• Z also joins an advanced course of Marketing Management
for 4 months at IIM, Ahmedabad, fees of the course,
Rs.2,50,000 is paid by F Ltd.
• Determine the perquisite value of the education facility.

Answer 19

Computation of taxable value of education facility [As per Rule 3(5)]
• (1)(a) School fees of his children, studying in a school
run by employer:
• (Rs.4,000 x 12) - (1,200 x 12) 33,600
• (b) Hostel fees: (3,000 x 12) – (900 x 12) 25,200
• 2) Fees paid for Marketing Management course for
Mr.Z ( it is a fully exempted perquisite) Nil –
(Employer liable to FBT – Employee Welfare)

Question 20
• Mr.D takes interest-free loan of Rs.2,50,000
on 1.11.08 from his employer to construct his
house. The loan is repayable in 50 monthly
installments from January 2008. Compute the
value of interest free loan. SBI Lending rate
8.5% p.a. (for housing loans not exceeding 5
years).

Answer 20
• Perquisite value of interest-free loan:
• = Rs.8,642

Computation of taxable value of Loan provided by employer [As
per Rule 3(7)(i)]
• Time period during which loan remains outstanding Balance on the last
• day of the month
• November 2,50,000
• December 2,50,000
• January 2,45,000
• February 2,40,000
• March 2,35,000
• Total 12,20,000
• Perquisite value of interest-free loan:
• 12,20,000 x 8.5% x 1/12 = Rs.8,642

Question 21
• Mr.C is an accountant of D Ltd. He gets salary of Rs.25,000
pm. He has purchased motor car and washing machine from
the company on 1 February 2009. Particulars of cost and sale
price of the two assets are given below:
• Year of Purchase/ Particulars of the Asset/ Purchase
Price(Rs)/ Sale price(Rs)
• 01.07.2005 /Motor car/ 2,50,000/ 85,000
• 15.09.2004/ Washing Machine /10,000/ 5,000
• Compute the taxable value of perquisites for the assessment
year 2009-10

Answer 21
• Taxable value of perquisite 43,000 /1,000
• Total = Rs 44,000

Computation of taxable value of perquisites on transfer of moveable assets
[As per Rule 3(7)(viii)]
• Motor car (Actual Cost) 2,50,000
• Date of Purchase 01.07.2005
• Less: Depreciation @ 20% on WDV from 01.07.2005 to
30.06.2006 50,000
• WDV 2,00,000
30.06.2007 40,000
• WDV 1,60,000
30.06.2008 32,000
• WDV 1,28,000

Washing Machine
• Washing Machine (Actual Cost) 10,000
• Date of Purchase 15.09.2004
• Less: Depreciation @ 10% on SLM from 15.09.2004 to 14.09.2005 1,000
• WDV 9,000
• Less: Depreciation @ 10% on WDV from 15.09.2005 to 14.09.2006 1,000
• WDV 8,000
• WDV 7,000
• WDV 6,000

Taxable value of perquisite
• Particulars Motor Car / Washing Machine
• WDV on the Asset 1,28,000 / 6,000
• Less: Amount recovered from employee
• 85,000 / 5,000
• Taxable value of perquisite 43,000 /1,000
• Total = Rs 44,000

Illustration 22 : (based on different allowances
received by employee)
• From the following particulars, compute gross salary of Mr X for the assessment
year 2009-10. He is employed in textile industry in Mumbai at a monthly salary
of Rs.4000. He is entitled to commission of 1% on sales achieved by him, which
were Rs.10 lakh for the year.
In addition, he received the following allowances from the employer during the
previous year:
1. Dearness Allowance Rs.2000 per month which is granted under terms of
employment and counted for retirement benefits.
2. Bonus Rs.32000
3. House Rent Allowance Rs.1000 per month (Rent paid for house in
Mumbai Rs.1200 per month)
4. Entertainment Allowance Rs.1000 per month
5. Children Education Allowance Rs.500 per month
6. Transport Allowance Rs.1000 per month
7. Medical Allowance Rs.500 per month
8. Servant Allowance Rs.200 per month
9. City Compensatory Allowance Rs.300 per month
10. Research Allowance Rs.500 per month (amount spent on research
Rs.3000)

Answer 22
• Gross Salary: 152,800

• Solution:
Computation of Income from Salary of Mr. X for the Assessment Year 2009-10
• Basic Salary 48,000
Dearness Allowance 24,000
Commission 10,000
Bonus 32,000
• House Rent Allowance
(Rs.1000 x 12 – Amount exempt Rs.6200)*
5,800
• Entertainment Allowance 12,000
• Children Education Allowance
(Rs.500 x 12 – Amount exempt Rs.100 x 2 x 12)
3,600

• Amount of HRA exempt is least of 3 amounts
• a) 50% of Salary (Basic Salary + DA granted under terms of
employment + Commission based on percentage of turnover
– Rs.48,000 + Rs.24,000 + Rs.10,000 = Rs.82,000) = Rs.41,000
• b) Actual HRA received : Rs.1000 x 12 = Rs.12,000
• c) Rent paid (Rs.1200 x 12) – 10% of Salary (Rs.82,000)
Rs.14,400 – Rs.8,200 = Rs.6,200

• Transport Allowance
(Rs.1000 x 12 – Amount exempt Rs.800 x 12)
2,400
• Medical Allowance (fully taxable) 6,000
Servant Allowance (fully taxable) 2,400
• City Compensatory Allowance (fully taxable) 3,600
• Research Allowance
(Rs.500 x 12 – Amount exempt Rs.3000)
3,000
• Gross Salary: 152,800

Question 23
• X, is employed at Delhi as Finance Manager of R Ltd.
• The particulars of his salary for the previous year 2008-09 are as under:
• Basic Salary Rs.16,000 p.m..
• Dearness allowance Rs.12,000 p.m.
• Conveyance Allowance for personal purpose Rs.2,000p.m.;
• Commission @2% of the turnover achieved which was Rs.9,00,000 during
the previous year and the same was evenly spread.
• HRA Rs.6,000 pm. The actual rent paid by him Rs.5,000 pm for an
accommodation at till 31.12.08.
• From 1.1.08 the rent was increased to Rs.7,000 pm.
• Compute taxable HRA.

Answer 23
• Taxable HRA 35,550 from April to December
2008
• Taxable HRA 5,850 from January to March,
2009

Solution
• Note: If there is an increase in rent paid, it is
advisable to calculate the exemptions
separately based on the time period.
• Rent before
• and after increase.

April to December 2008
• Salary for HRA (for 9 months)= Basic Pay + DA(considered for retirement benefits)
+ Commission (if received as a fixed percentage on turnover as per terms of
employment)
• = (16,000 × 9) + (12,000 × 9) + (2% of 9,00,000 × 9/12) = 2,65,500
• Taxable HRA: (April to December 2008). Total time=9 months
• Particulars:
• Amount received during the financial year for HRA 54,000
• Less: Exemption u/s 10(13A) Rule 2A. Least of the followings:
• (b) 50% of Salary 1,32,750
• (c) Rent paid less 10% of Salary 18,450 18,450
• [5,000 × 9 – 10% of 2,65,500]
• Taxable HRA 35,550 from April to December 2008

January to March, 2009
• Salary for HRA (for 3 months)= Basic Pay + DA(considered for retirement
benefits) + Commission ( if received as a fixed percentage on turnover as
per terms of employment)
• = (16,000 x 3) + (12,000 x 3) + (2% of 9,00,000 x 3/12)=88,500
• Taxable HRA: Particulars:
• Amount received during the financial year for HRA 18,000
• Less: Exemption u/s 10(13A) Rule 2A. Least of the followings:
• (b) 50% of Salary 44,250
• (c) Rent paid less 10% of Salary
• [7,000 × 3 – 10% of 88,500] 12,150 12,150
• Taxable HRA 5,850 from January to March, 2009

Question 24
• Z is employed in A Ltd. As on 31.3.09,
• His basic salary Rs.6,000 p.m.
• He is also entitled to a dearness allowance of 50% of basic salary. 70% of
the dearness allowance is considered for retirement benefits.
• The company gives him HRA Rs.3,000pm.
• With effect from 1/1/09 he receives an increment of Rs.1,000 in his basic
salary.
• He was staying with his parents till 31.10.2008.
• From 1.11.08 he takes an accommodation on rent in Delhi and pays
Rs.2,500 pm as rent for the accommodation.
• Compute taxable HRA for the assessment year 2009-10.

Answer 24
• Taxable HRA 27,280

Computation
• Salary for the purpose of HRA
• shall cover the time period for which the
assessee, who is in receipt of HRA,
• resided in a rented accommodation
• and the rent paid by such assessee, is more
than 10% of salary.

Salary for HRA (for 5 months)
• Salary for HRA (for 5 months)= Basic Pay +
DA(considered for retirement benefits) +
Commission ( if received as a fixed percentage on
turnover as per terms of employment)
• Basic Pay = (5,000 × 2) + (6,000 × 3) = 28,000
• DA = 50% of Basic Pay x 70% forming part of
retirement benefits
• [ 50 % x 28,000 x 70%] = 9,800
• Total Salary for HRA 37,800

Taxable HRA
• Particulars
• Amount received during the financial year for HRA (3,000 ×
12) 36,000
• Less: Exemption u/s 10(13A) Rule 2A.
• Least of the followings:
• (d) Actual amount received 36,000
• (e) 50% of Salary 18,900
• (f) Rent paid less 10% of Salary
• [2,500x 5 – 10% of 37,800] 8,720 8,720
• Taxable HRA 27,280

Questions for Revision
• Discuss the different kinds of Provident funds
and tax treatment of the following for the
different Provident Funds:
– Employers contribution to provident fund
– Interest credited to provident fund
– Lump sum payment at the time of retirement
– Deductions u/s 80C on employees contribution
•

• What is an approved superannuation fund ?
What are the tax benefits in case of an
approved superannuation fund ?
• What is a Perquisite ? Give three examples of
fully taxable perquisites ?
• What is a specified employee with regard to
Perquisites ? Give some examples of
perquisites that are taxable only in the hands
of specified employees ?

• Give five examples of tax free perquisites?
• How is Rent free unfurnished accomodation
valued as a perquisite ? What is the position in
case the accommodation is furnished ?
• Discuss the valuation of perquisite in case of
free educational facility provided by the
employer ? What is the position in case the
fees are paid or reimbursed by the employer ?

• Discuss the valuation of perquisite in case of
use of movable assets ? What would be the
valuation in case of transfer of the asset ?

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