Deemed Income

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Pallavi Jain (Querist)
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30 December 2009 A school providing concessional education to the children of staff member. will it be treated as deemed income of the respective staff member?

CMA. Dinesh S Adhikari, ACMA

CMA. Dinesh S Adhikari, ACMA (Expert)
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30 December 2009
Yes, It will be taxable u/s 17(2) as perquisite as follow:

=Value of Education for other children-Rs. 1000 per child per month.

So, If according to above method there is positive amount, that amount will be taxable in the hands of that staff employee.

eg. If child is studying in Xth class and fees of this class is Rs. 2,500 pm per child. Therefore, Taxable amount will be:

=2,500-1,000
= Rs. 1,500 pm per child

For 1 year = 1,500*12
= 18,000

Therefore, Rs. 18,000 will be included in the Salary of the Staff Employee.

Please Note: If employee also paying some amount to School then that paid amount will be deductable from Rs. 18,000.

Regards!!!
Dinesh S. Adhikari

ANIL JANGID

ANIL JANGID (Expert)
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30 December 2009 agree

CA.ViVeK M ACA

CA.ViVeK M ACA (Expert)
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30 December 2009 If the school charges the same fee which has been charging for other student, then , there is no perquisite will be applicable.

If it is free of cost or at a concessional rate, then, perquisite will be applicable.