ITR

Tax-Free Perquisites – List as per Income Tax Act

Any kind of non-cash benefit offered by the employer to a worker is referred to as a perquisite.

Any kind of non-cash benefit offered by the employer to a worker is referred to as a perquisite. In those other words, a perk is anything the company gives the employee in exchange for their labour that is not in the form of cash. The head of income defined as Income from Salaries is where perks given by an employer to an employee are taxed. While in the employee’s possession, some perquisites are tax-free. The employer and employee should be informed of the list of tax-free benefits offered by the Income Tax Act in order to effectively prepare their taxes and reduce their tax obligations. Some of the tax-free benefits described in the Income Tax Act are listed in this article.

Medical Facilities & Reimbursements

A tax-free perk is offered when medical care is given to an employee or a member of their family in a facility managed by the company, such as a hospital, pharmacy, or nursing home. Amounts paid by the employee for medical expenses incurred for themselves or a member of their family up to a limit of ₹15,000 in the preceding year would also be considered tax-free perquisites.

Recreational Facilities

Any recreational facility offered by the employer to a group of workers is not taxable. Therefore, the employer’s provision of uniform health club, sports, and similar amenities to all employees qualifies as a tax-free perk.

Training for Tax-Free Perquisites

Any expenses made by the employer for the provision of training to the workers, or via the payment of charges or refresher courses taken by the employees, may be considered tax-free perquisites.

Telephone & Laptops

The use of an employee’s or a member of his household’s laptop or computer that belongs to the employer may result in expenses for the employer that is tax-free perquisites.

Education for Children

Any sum provided as a scholarship by a company to an employee’s kid is a perk that is tax-free. Additionally, the value of the benefits offered could be handled as a tax-free perquisite if indeed the amount does not exceed ₹1000 per child per month if the employer owns and maintains an educational facility and offers free educational opportunities to the employee’s children or where such opportunities are provided in just about any institution as a result of the employee’s employment with that employer.

Food and Beverage

A tax-free requirement is when an employer offers free food and non-alcoholic drinks to an employee while they are on the job at the workplace or via a paid voucher that is only redeemable at specific locations and cannot be transferred. This requirement only applies if the value of the meal is up to ₹50.

Loan to Employees

Any loan given as a benefit to an employee for less than ₹20,000 may be considered a tax-free perk. Additionally, a loan made by an employer for medical care related to one of the conditions listed in Rule 3A of the Income Tax Rules is tax-free.

Insurance Premium & Pension Contributions

It is a tax-free perk for an employer to pay the insurance premium for an accident policy that the employee has purchased. A tax-free perk is also available for employers who contribute up to ₹1,50,000 per employee per year to their employees’ superannuation funds.

Prerequisites Provided Outside India

perks that the government permits its citizens working outside of India to receive in exchange for providing non-taxable services there.

Rent Free House/ Conveyance Facility

Providing a judge of a supreme court or high court with rent-free housing and transportation services is not considered a taxable perk.

Residence to Officials of Parliament

A parliamentary officer, union minister, or leader of the opposition in the house of representatives may live in a furnished, rent-free residence with maintenance included; this benefit is not taxable.

Accommodation in a Remote Area

If the accommodation is given to an employee working at a mining site, onshore oil exploration site, dam site, project execution site, power generation site, or offshore site that is of a temporary nature and has a plinth area that is not surpassing and over 800 square feet, is located approximately 8 kilometers from the local limits of the municipality, or a military installation, the housing given by the employer will be a tax-free prerequisite.

Tax by Employer on Non-monetary Perquisites

In the employee’s hands, a tax that the company pays on non-monetary benefits that the employee receives would be exempt. The chairman and members of the union public service commission received the stated perquisites when they were in service and in retirement.

Leave Travel Concession (LTC)

In proportion to the purchase of the travel aid or concession that he has received from or is owed to him by his employer family in connection with his action, the worker is eligible to the exclusion under section 10(5).

  • on vacation somewhere in India 
  • After retirement from the military or the conclusion of his duty, to any location in India.

Also Know about: Filing Income Tax Return

Conclusion 

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