Perquisite

Perquisite:

Section 17(2) of the Income Tax Act in India pertains to the computation of an employee's income. It deals with the inclusion of certain perquisites or benefits provided to employees by their employers in their taxable income.
 
There are the following Perquisite as per Section 17 (2):

1. Any accommodation (Building in which someone may live or stay) provided by the employer.
2. Expenditure for Traveling.
3. the Value of any other Fringe Benefits (Insurance Benefit and Social Security's etc.)
4. Any sum payable by the employer, whether directly or through a fund other than a recognized provident fund (RPF) or an approved superannuation fund, to affect an assurance on the life of the assesses or to affect a contract for an annuity.

Rules for the valuation of Perquisite under section 17(2).

1. Value of Furnished RPF:
             Central and State Government Employee- License fees for the house are determined and reduce by the Rent pad by the individual.
             Non-Government Employee- Perquisite value is 15% in cities with the Population above the 25 Lakh.
                                                               Perquisite value is 10% in cities with the Population between 10-25 lakhs.
                                                               Perquisite value is 7.5% in cities with the Population less than 10 lakhs.
The value the Perquisite will be Rent paid by Organization or 15% of the salary, whichever is less.


2. Accommodation in Hotel- The value of Perquisite is 24% of salary or charges paid to the hotel, whichever is less.
3. Company CAR or Vehicle: The value of company car or vehicle is provided by an employer based on the Actual cost.