Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
What counts as a perquisite
A perquisite is a benefit in kind in addition to your cash salary: employer-provided or concessional accommodation, a company car, concessional loans, ESOPs, club fees, and so on. Each is added to your salary income and taxed at your slab.
How they're valued
The law prescribes valuation rules for each perk — for example, accommodation is valued as a percentage of salary, and a car by engine capacity and usage. Some benefits are exempt or lightly taxed (such as certain reimbursements), and others are taxed in full. Your employer computes the perquisite value, adds it to salary and deducts TDS. Valuation rules are detailed — confirm for a specific perk.
A worked example
Example: you get a company flat and a car. The accommodation is valued under the rules at, say, ₹1.8 lakh a year and the car at ₹28,800 — both added to your taxable salary, with TDS adjusted accordingly. ESOPs are a special case with two taxing points. Knowing the perquisite values helps you read your Form 16. Our team can review your perks.