Kolkata: According to the income tax laws, a perquisite is a non-cash benefit which is granted by an employer to the employee. It is defined as a benefit which an employee receives or is entitled to by the virtue of the employee’s job or position in the company. The New Income Tax Bill 2025 has elaborated the term perquisites and what it could comprise.
The New Income Bill 2025 is ready for the government to table in Parliament. For any salaried taxpayer, the term “perquisite” represents quite a maze since there are numerous items that are treated as perquisite to an employee. It needs to be borne in mind that the New Income Tax Bill 2025 does not intend to change any direct tax rates, slabs or rebate and those mentioned by FM Nirmala Sitharaman in her Budget 2025 stand unchanged.
New Income Tax Bill 2025: The prominent perquisites
According to the proposed legislation, perquisites can be as listed below:
- the value of rent-free accommodation provided to the assessee by his employer computed in prescribed manner
- the value of any accommodation provided to the assessee by his employer at a concessional rate which is in excess of rent recoverable
- the value of any benefit provided free of cost by a company to an employee, who is a director or has substantial interest in the company
- the value of any specified security or sweat equity shares allotted or transferred, directly or indirectly, by the current employer, or former employer, free of cost or at concessional rate to the assessee
- any sum payable by the employer to effect an assurance on the life of the assessee or to effect a contract for an annuity other than a recognised provident fund, or
- an approved superannuation fund, or a Deposit-linked Insurance Fund.
Value of medical treatment
The Bill also goes on to state “Nothing in sub-section (1) shall apply to––
(a) the value of any medical treatment provided to an employee or any member of his family in any hospital maintained by the employer;
(b) 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—
(i) 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…”
The Bill also states “(a) the expenditure on medical treatment and stay abroad shall be excluded from the 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 such amount as prescribed.
Perquisites have often been a matter of contention for income tax calculations. The New Income Tax Bill 2025 that is ready for tabling in Parliament makes a mention of different kinds of perquisites that will be of relevance to an employee for the computation of income tax. Here is a first look. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
