1. Interest-free loan: Some employers have a policy of providing interest-free loans or loans at a rate below the market rate of interest to employees. This privilege is considered a perquisite, and the monetary value of such a benefit is added to the employee's income. The value of this prerequisite is the excess of the market rate of interest of such a loan over the interest charged by the employer.

    > Calculation of Market rate of interest:

The rate charged by the S.B.I bank on the first day of the financial year for the loan provided for similar purpose is considered as market rate of interest. For computing the value of this perquisite, calculation is done on a monthly basis on the balance outstanding at the end of each month. Transactions during the month have no impact on the computation but only the balance at the end. There would be no interest if the balance outstanding is nil at the end of the month.

    > Exceptions:

In cases where the loan is provided for the treatment of specified diseases (other than reimbursement under a medical insurance scheme, which shall be taxable), or the loan is provided for some other reason but the amount doesn’t exceed Rs. 25,000, the value of this perquisite shall be ignored.

2. Travelling and Touring

    > For holidays:

The amount incurred by the employer for the traveling, touring, and accommodation of the employee or their household member during the holidays shall be considered as a prerequisite. In cases where the amount is not paid to an outside vendor, but in-house facilities of the employer are used for providing such services, the market value of such services shall be considered.

    > Official tour:

During the official tour, the cost incurred by the employer for the household member of the employee accompanying him shall be considered as a prerequisite. In cases where such an official tour is extended for vacation, only the expenditure pertaining to those additional days shall be considered. In all the above cases, the amount paid by the employee shall be deducted to arrive at the value of such a benefit.

Household members for taxing perquisites shall include spouses, children, and their spouses, parents, servants, and dependents.

3. Free food: Free meals and non-alcoholic beverages up to Rs. 50 per meal is not considered as a prerequisite and is exempt from tax. This benefit is available if the meal is provided in the office during working hours or through non-transferable paid vouchers usable only at eating joints, e.g., Sodexo card.

This amenity exceeds the limit of Rs. 50 shall be considered as a prerequisite, reduced by the amount paid by the employee for the food. The benefit of this limit of Rs. 50 shall not be applicable in cases where the employee has opted for the new regime of income tax.

4. Gifts: Gifts or gift vouchers given by the employer to the employee or their household members shall be considered as a perquisite only if the gifted value exceeds Rs. 5,000 during the year."

5. Membership fees: Where an employer pays for the membership/annual fees charged on a credit card for a facility availed by an employee or their family member, such value shall be considered as a perquisite in the hands of the employee. The amount paid by the employee for this service shall be reduced from such value."

      > Exception:

If such expenditure is incurred only for official purposes and such declaration is given by the employer, additionally, the related details for such expense are maintained including the date and nature of expenditure, such value shall not be taxable.

6. Club membership: The amount paid by the employer for the club membership for the employee or their household member shall be considered as a perquisite in the hands of the employee. The amount paid by the employee to compensate for this expense shall be reduced from such value.

    > Exceptions:

The following amounts shall not be considered for the value of this perquisite and shall be ignored:

* If the facilities of health clubs, sports facilities, etc., are provided uniformly to all employees.

* Initial fees for corporate membership shall also be ignored for computing the value of the perquisite. The reason is that this additional amount is not specific to an employee. The benefit of such an additional amount paid for corporate membership doesn’t remain with the employee at the time of leaving the organization.

* If such expenditure is incurred only for official purposes and such declaration is given by the employer, additionally, the related details for such expense are maintained including the date and nature of expenditure.

7. Medical Perquisite: The taxability of the perquisite with respect to medical facilities provided by the employer to the employee or their family member is discussed below. Family members shall include the spouse and children of the employer. Siblings and parents shall also be considered as a family as long as they are fully dependent on the employee.

    > Medical treatment within India:

The amount incurred or reimbursed by the employer for medical treatment of the employee or their family member within India shall not be included as a prerequisite, i.e., fully exempt, in the following cases:

* If the hospital is maintained by the employer/government/local authority.

* If the hospital is approved by the government.

* For specified diseases, as long as the employee obtains a certificate from the hospital mentioning the disease and the amount paid.

* Amount paid for health insurance of the employee.

* Amount reimbursed for the purposes of claiming deduction under section 80D.

* For details on deductions, refer to deductions under Chapter VI-A.

    > Medical treatment outside India:

The following amounts incurred or reimbursed by the employer in respect of medical treatment outside India shall be fully exempt to the extent permitted by the Reserve Bank of India (RBI):

* Medical treatment, travel, and stay of the employee or their family member.

* Travel and stay of one attendant accompanying the patient.

* The travel expenses mentioned shall not be taxed as a perquisite only if the annual income of the employee is below two lakhs before considering such travel expense as a prerequisite.

8. Use of asset: Where a movable asset belonging to the employer is used by the employee or their household members, 10% of the cost of such asset shall be added as a prerequisite to the salary of the employee for each financial year. If such an asset is rented or hired by the employer, the 10% shall be replaced with the actual charges incurred by the employer. The amount recovered from the employer shall be reduced from the value of this perquisite.

Laptops, computers, and assets already considered for other perquisites shall be ignored in the case of this perquisite.

9. Transfer of asset: Where a movable asset belonging to the employer is permanently transferred to the employee or their household members, the value of the perquisite shall be the actual cost of the asset reduced by the wear and tear at the following rates for each completed year: