Академический Документы
Профессиональный Документы
Культура Документы
office or position in addition to salary or wages y Something that benefits a man by going into his own pocket y Need not be only in kind. It can be in cash.
Allowed by Employer to Employee Allowed during Continuance Of employment Directly Depend upon service Personal advantage To the employee Derived by Virtue of Employers authority
Other conditions
y Employer and employee relationship should
exist at any point of time- need not be an employee now. y Legal origin is important- Un authorized advantage taken by employee without employers authority will not become perquisites.
Perquisites Includes
1. Rent free Accommodation Provided By employer (Accommodation Related perquisites (1-3) including sweeper, gardener, watchman, gas, electricity, etc) 2. Concessional Accommodation Provided By employer 3. Value of Benefits provided like furniture in the accommodation 4. Personal Obligations of Employee Met by employer 5. Funds paid by employer other than RPF/Insurance fund 6. Fringe Benefits Allowed To employees of organisation other Than companies
Category B
1.Car given by employer 2. Transport facility given by transport undertakings except Railway and airlines. ( only to Specified Employee)
5.
Private employees
RFA-Government employee
y Exercise:- Mr. X is working in Central government service given rent free accommodation in an government apartment at free of cost. The license fee prescribed by government is Rs.3000 but fair rental value of the house is Rs. 10,000. How much is taxable? y Answer:- Fair rent is not considered. The license fee Rs. 3,000 is taxable in the hands of Specified employee.
10
2. Private Employees(RFA)
y Value of perquisites depends on Population of
Population Up to 10 lakhs
Owned By employer
Rented
15% salary
or amount paid
10% of salary By company To outsider Which ever Is less
Owned By employer
Rented By company
11
7.5% of Salary
on the population of the city percentage differs. Big city it is 15% of salary, medium city it is 10% and small city it is 7.5% of salary for accommodation with out any facility like furniture.
y If house is rented by employer given to employee
it is 15% of salary or rent paid by employer whichever is less taxable for specified employees irrespective of the type of city.
12
13
(including taxable allowances) by the employee himself. y Excludes all *perquisites and *DA which will not come under retirement purpose
y If any allowance is exempted (like HRA(partly),
children educational allowance up to Rs.100 Per month or transport allowance up to Rs. 800 per month etc.), to the extent exempted is not included in the meaning of salary but balance is included in the meaning of salary.
14
Others . (non-taxable)
y Interest-Free Loan y Interest-free / concessional loan of an amount not
exceeding Rs.20,000
y Gift-in-kind up to Rs.5,000 in a year. y Employer's contribution to staff group insurance
scheme.
Exercise-RFA
y Value of rent free accommodation : Preetham is sales manager of a y y y y y y y y y
private company and for previous year 2007-08,he received the following emoluments(amts in Rs) Basic Salary 248000 Bonus 16000 Dearness allowance(50% forming part of salary) 60000 Project allowance 15000 Commission on sales 16000 City compensatory allowance 25000 Medical allowance 12000 Employer contribution to recognized provision fund 20000 Salary pertaining the year 2008-09 has been received in advance 20000
owned by the employer. The population of Bangalore may be assumed to be 50 lakhs as per 2001 census Q. Determine the taxable value of the perquisite in respect of rent free accommodation.
17
owned by the employer. The population of jaipur may be assumed to be 15lakhs as per 2001 census y Determine : a) Meaning of salary for RFA y b)the taxable value of the perquisite in respect of rent free accommodation. y 1. Meaning of salary:-
taxable allowances by the employee himself. y Excludes all *perquisites and *DA which will not come under retirement purpose
children educational allowance up to Rs.100 Per month or transport allowance up to Rs. 800 per month etc.) are not included in the meaning of salary.
18
Exercise
y Value of free rent accommodation : sri Mohan is purchase manager of a
private company and for previous year 2007-08 he received the following emolumentsy y Basic Salary y Bonus y Dearness allowance(50% forming part of salary) y Project allowance y Commission on purchase y City compensatory allowance y Medical allowance y Employer contribution to recognized provision fund y Salary pertaining the year 2008-09 has been received in advance y y He is also in part employment with B ltd and is receiving salary of Rs
80000 P.A. he has been provided with a rent free accommodation in Mysore owned by the employer. The population of Mysore may be assumed to be 15 lakhs as per 2001 census. Determine taxable salary
20
solution
y y y y y y y y y y y y y y y y y
Computation of taxable salary of Sri Mohan for assessment Year 2008-09 Basic Salary Bonus Dearness allowance(50% forming part of salary) Project allowance Commission on purchase City compensatory allowance Medical allowance Employer contribution to RPF in excess of 12% of salary [20000- 12% of (120000+ 50% of 60000)] Salary from B ltd Advance of salary Value of housing facility[10% of (120000+16000+30000+ 15000+16000+25000+12000+80000)] Taxable Salary 120000 16000 60000 15000 16000 25000 12000 2000 80000 20000 31400
397400
21
Exercise
y Value of concessional accommodation: Sri Basant is purchase manager of a y y y y y y y y y y y What would be the value of accommodation if the employer charges rent of
private company and for the previous 2007-08 he received the following emolumentsBasic Salary 240000 Bonus 32000 Dearness allowance(50% forming part of salary) 120000 Project allowance 30000 Commission on purchase 32000 City compensatory allowance 50000 Medical allowance 24000 Employer contribution to recognized provision fund 40000 2 months salary for year 2008-09 has been received in advance 20000
Rs 2000 p.m. in the following independent cases: y (a) The accommodation is provided in Hyderabad where popln as per 2001 census exceeds 25 lakh y (b) The accommodation is provided in Alwar where popln as per 2001 census exceeds 18 lakh y (c) The accommodation is provided at Tumkore (popln less than 10 lakhs)
22
Solution
y Soln: The valuation of accommodation provided at concessional
rent shall be as undery y Place of accommodation Value of perquisite y Hyderabad 15% of salary less rent recovered = Rs 70200-
24000=Rs46200 y Alwar 10% of salary less rent recovered = Rs 4680024000=Rs22800 y Tumkore 7.5% of salary less rent recovered =Rs 3510024000=Rs11100
y y Salary = 240000+32000+60000+32000+30000+50000+24000 = Rs
468000
y
23
25
Rs.100 per child per month is exempted per child. Maximum two children. Beyond is taxable y Hostel Rs.300 per month per child exempted. Maximum two children. Beyond it is taxable to the employee
26
27
cost of education in similar institution in the near locality (minus )Rs. 1000(minus) amount recovered. Example:- Employer pays Rs. 1500 per month to the school selected by employee for three children and one grand children. How much is taxable perquisites?
28
amount recovered y Important Note: Only for own children exemption of Rs. 1000 allowed. But for the relative s children such deduction is not allowed.
29