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My 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.
My children are getting scholarship from my company under brilliant student program. Whether it is chargeable to tax?
My children are getting scholarship from my company under the Brilliant Student Program. Is this scholarship taxable? Yes, it is fully exempt from tax under Section 10(16) of the Income Tax Act. As per Section 10(16): "Any scholarship granted to meet the cost of education is exempt from income-tax."Read more
My children are getting scholarship from my company under the Brilliant Student Program. Is this scholarship taxable?
Yes, it is fully exempt from tax under Section 10(16) of the Income Tax Act.
As per Section 10(16):
Hence, It does not matter whether the scholarship is given by a government, a trust, or a private employer, as long as the amount is meant solely for education expenses.
Different scenarios:
How is income tax calculated on LTC or LTA?
How is income tax calculated on LTC (Leave Travel Concession) or LTA (Leave Travel Allowance)? ✅ Relevant Legal Provisions: Section 10(5) of the Income Tax Act, 1961 Rule 2B of the Income Tax Rules, 1962 📜 Bare Act Extract – Section 10(5): “In computing the total income of a previous year of an indiRead more
How is income tax calculated on LTC (Leave Travel Concession) or LTA (Leave Travel Allowance)?
✅ Relevant Legal Provisions:
Section 10(5) of the Income Tax Act, 1961
Rule 2B of the Income Tax Rules, 1962
📜 Bare Act Extract – Section 10(5):
📜 Rule 2B – Conditions for Exemption:
The exemption is available only for travel within India.
The exemption applies to actual travel fare, not for other expenses like sightseeing, food, or hotel stays.
It can be claimed twice in a block of 4 calendar years (current block: 2022–2025).
Exemption allowed for:
Air travel (economy fare of national carrier)
Rail fare (AC first class)
Bus fare (deluxe class, if rail/air not available)
📘 Family Definition (Explanation to Section 10(5)):
Includes:
Spouse
Children (maximum of 2 children born after 1 October 1998)
Parents, brothers and sisters wholly or mainly dependent on the employee
🧮 Tax Calculation – Step-by-Step:
🧾 Illustration:
LTA received: ₹40,000
Actual travel (AC train) fare for eligible family: ₹25,000
Exemption allowed: ₹25,000
Taxable Amount: ₹15,000
📌 Other Key Points:
Proof of travel (tickets, boarding passes, etc.) must be retained.
Unused LTC in a block? You can carry forward 1 travel to the next block, and claim it in the first year only.
If LTC is encashed without travel, it becomes fully taxable.
✅ Conclusion:
Under Section 10(5) read with Rule 2B, LTA/LTC is exempt from income tax to the extent of eligible travel fare for journeys within India. Any excess amount or non-travel expenses reimbursed are fully taxable.
See lessIs group Insurance premium paid by employer is taxable in the hand of employee?
Is Group Insurance Premium paid by the employer taxable in the hands of the employee? ✅ Relevant Legal Provisions: Section 17(2)(viii) of the Income Tax Act, 1961 Rule 3(1) and Rule 3(2) of the Income Tax Rules, 1962 📜 As per Section 17(2)(viii): “Perquisite” includes the value of any other benefitRead more
Is Group Insurance Premium paid by the employer taxable in the hands of the employee?
✅ Relevant Legal Provisions:
Section 17(2)(viii) of the Income Tax Act, 1961
Rule 3(1) and Rule 3(2) of the Income Tax Rules, 1962
📜 As per Section 17(2)(viii):
🔍 Analysis: Types of Group Insurance
🧾 Rule 3 Clarification – Perquisite Valuation:
As per Rule 3(1) and 3(2) of the Income Tax Rules, premium paid for group insurance is not treated as a taxable perquisite unless the employee is the direct beneficiary or owner of the policy.
📘 Conclusion:
✅ If your employer pays the premium of group insurance policies (term life, health, or personal accident), it is not taxable in your hands as an employee.
❌ However, if the employer assigns the policy to you, especially in case of a Keyman Insurance, the surrender value or assigned value becomes taxable under the head “Salaries”.
See lessHow tax is calculated on interest free loan provided by my company?
How is tax calculated on interest-free loans provided by my company (employer)? If your company grants you an interest-free or concessional loan, it is treated as a taxable perquisite under Salary if the total loan exceeds ₹20,000, except in cases like medical treatment for specified illnesses. TheRead more
How is tax calculated on interest-free loans provided by my company (employer)?
If your company grants you an interest-free or concessional loan, it is treated as a taxable perquisite under Salary if the total loan exceeds ₹20,000, except in cases like medical treatment for specified illnesses. The tax is computed based on SBI rates and added to your gross salary.
✅ Relevant Legal Provisions:
Section 17(2)(viii) of the Income Tax Act, 1961
Rule 3(7)(i) of the Income Tax Rules, 1962
As per Section 17(2)(viii):
Explanation: The provision includes concessional or interest-free loans as perquisites taxable under the head Salary.
🧾 Rule 3(7)(i) – How to Compute Taxable Value of Interest-Free Loan:
🧮 How to Calculate Taxable Perquisite:
Perquisite Value=(Loan Amount×SBI Rate×No. of months)−Interest, if any, recovered from employee
SBI Rate: As per prevailing SBI lending rate on 1st April of the financial year
Loan Value: Opening balance at the beginning of each month
Exemption: If aggregate loan amount is ≤ ₹20,000, no perquisite value is taxable
📘 Illustration:
Loan Amount: ₹5,00,000 (interest-free)
Date of loan: 1st April 2024
SBI rate on 1st April 2024: 9% p.a.
Interest recovered from employee: ₹0
Taxable Perquisite=₹5,00,000×9%=₹45,000
₹45,000 will be treated as salary income and taxed at slab rate applicable to the employee.
📌 Special Cases: