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How much of Hostel expenditure allowance is taxable?
Hostel Expenditure Allowance is partially exempt from tax under Section 10(14)(ii) of the Income Tax Act, 1961, read with Rule 2BB(2)(g) of the Income Tax Rules, 1962. Exemption Limit: As per Rule 2BB(2)(g): Hostel Expenditure Allowance is exempt up to ₹300 per month per child, for a maximum of 2 chRead more
Hostel Expenditure Allowance is partially exempt from tax under Section 10(14)(ii) of the Income Tax Act, 1961, read with Rule 2BB(2)(g) of the Income Tax Rules, 1962.
Exemption Limit:
As per Rule 2BB(2)(g):
✅ Maximum exemption = ₹300 × 2 children × 12 months = ₹7,200 per annum
See lessWho is specified employee?
A “Specified Employee” is a category of employee for whom certain perquisites (non-monetary benefits) provided by the employer are fully taxable under Section 17(2) of the Income Tax Act, 1961, read with Rule 3 of the Income Tax Rules, 1962. As per Explanation (iv) to Section 17(2) of the Income TaxRead more
A “Specified Employee” is a category of employee for whom certain perquisites (non-monetary benefits) provided by the employer are fully taxable under Section 17(2) of the Income Tax Act, 1961, read with Rule 3 of the Income Tax Rules, 1962.
As per Explanation (iv) to Section 17(2) of the Income Tax Act, an employee is called a Specified Employee if he/she meets any one of the following conditions:
✅ Conditions:
Director of the company
Employee with substantial interest (i.e., owns ≥20% of equity shares in the company)
Employee whose salary (excluding non-monetary benefits) exceeds ₹50,000 per annum
🟡 Note: Salary here includes basic, DA (if part of retirement), bonus, commission, allowances, etc.
See lessHow to calculate tax on rent free furnished accommodation provided by the company?
As per Section 17(2)(ii) read with Rule 3(1) of the Income Tax Rules, 1962, if an employer provides a rent-free house, the value of the perquisite is calculated as: Step 1: Calculate Unfurnished Accommodation Value If employer owns the house: 15% of salary (metro city) 10% of salary (cities with 10–Read more
As per Section 17(2)(ii) read with Rule 3(1) of the Income Tax Rules, 1962, if an employer provides a rent-free house, the value of the perquisite is calculated as:
Step 1: Calculate Unfurnished Accommodation Value
If employer owns the house:
15% of salary (metro city)
10% of salary (cities with 10–25 lakh population)
7.5% of salary (other towns)
If house is on lease/rent:
Lower of actual rent paid by employer or above % of salary
Here, “salary” includes:
Step 2: Add Furniture Value (For Furnished Accommodation)
If the house is furnished, then the perquisite value is increased by:
🪑 Furniture includes – TV, fridge, sofa, washing machine, air conditioner, etc.
See lessMy company is giving me accommodation in its housing society at concessional rent. is it taxable? How?
Yes, it is taxable as a perquisite under the Income Tax Act. As per Section 17(2)(ii) of the Income Tax Act, if your employer provides you a house at a rent lower than the market value, the difference is considered a taxable benefit (perquisite). The perquisite value is calculated as per Rule 3(1likRead more
Yes, it is taxable as a perquisite under the Income Tax Act.
As per Section 17(2)(ii) of the Income Tax Act, if your employer provides you a house at a rent lower than the market value, the difference is considered a taxable benefit (perquisite).
The perquisite value is calculated as per Rule 3(1like this:
If employer owns the house:
15% of your salary (in metro cities) or 10% or 7.5% in other cities (based on population) Less Rent actually paid by you = Taxable perquisite amount
If employer has rented the house:
Lower of actual rent paid by employer OR above % of salary Less Rent paid by you = Taxable perquisite
👉 This amount is added to your salary income and taxed as per your slab.
See lessMy employer has provided me a cook, how much amount will be taxable in my salary?
If the cook is provided by your employer for your personal use, the entire cost incurred by the employer becomes a taxable perquisite. ✅ 100% Taxable Perquisite Includes: Salary paid to the cook Other expenses such as food, accommodation (if provided), or any reimbursement Under Section 17(2)(ii) ofRead more
If the cook is provided by your employer for your personal use, the entire cost incurred by the employer becomes a taxable perquisite.
✅ 100% Taxable Perquisite Includes:
Salary paid to the cook
Other expenses such as food, accommodation (if provided), or any reimbursement
Under Section 17(2)(ii) of the Income Tax Act, the term “perquisite” includes:
Further, Rule 3(3) of the Income Tax Rules, 1962 specifically covers the valuation of personal attendants, including cooks.
See lessMy employer has provided me free gas, electricity and water facility, how much amount will be added in my salary and what will be taxability?
Free supply of gas, electricity, or water for personal use is fully taxable as a perquisite. The amount actually paid or incurred by your employer will be added to your salary income for tax purposes. Section 17(2)(ii): “Perquisite includes the value of any benefit or amenity provided free of cost oRead more
Free supply of gas, electricity, or water for personal use is fully taxable as a perquisite. The amount actually paid or incurred by your employer will be added to your salary income for tax purposes.
Section 17(2)(ii):
“Perquisite includes the value of any benefit or amenity provided free of cost or at concessional rate by the employer…”
Tax Treatment under Rule 3(4):
If an employer provides free gas, electricity, or water for personal use (not for official use), the taxable value is calculated as follows:
See lessMy children are getting benefit of free education in my employer’s institute? Whether it is chargeable to tax?
My children are getting benefit of free education in my employer’s institute? Whether it is chargeable to tax? Yes, the value of free education provided by your employer to your children is considered a taxable benefit (perquisite) under the Income Tax Act. As per Section 17(2)(v) of the Income TaxRead more
My children are getting benefit of free education in my employer’s institute? Whether it is chargeable to tax?
Yes, the value of free education provided by your employer to your children is considered a taxable benefit (perquisite) under the Income Tax Act.
As per Section 17(2)(v) of the Income Tax Act, read with Rule 3(5) of the Income Tax Rules:
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See lessIf your employer runs a school or has an arrangement with any educational institution to provide free or concessional education to your children, it is treated as a taxable perquisite.
However, there is an exemption:
➤ If the cost of education per child does not exceed ₹1,000 per month, then the benefit is fully tax-free.