SBI Lending
This query is : Resolved
25 November 2022
What is the effective rate of interest for valuation of perquisite in respect of interest free loan for financial year 2022-23??
11 July 2024
For the valuation of perquisite in respect of interest-free or concessional loan provided to an employee, the effective rate of interest for the financial year 2022-23 (Assessment Year 2023-24) is determined by the Income Tax Rules under Section 10(7) of the Income Tax Act, 1961. The rules prescribe that the interest on such loans should be calculated at the rate charged by the State Bank of India (SBI) as on the 1st day of the relevant previous year in respect of loans for the same purpose advanced by it on the maximum outstanding monthly balance as a reference.
As of the latest available information, the rate of interest applicable for financial year 2022-23 is 7.10% per annum (as per SBI's rates for loans for the purpose of valuation of perquisites under Income Tax Rules). This rate may vary slightly depending on updates from the SBI or the specific period for which the loan was outstanding during the year.
Therefore, for the financial year 2022-23 (AY 2023-24), the effective rate of interest for valuation of perquisite in respect of interest-free or concessional loan would be 7.10% per annum, unless there are subsequent changes in the SBI's lending rates that would be applicable for such valuations. It's advisable to check the latest rates or consult with a tax advisor for any updates or specific calculations related to this valuation.
As of the latest available information, the rate of interest applicable for financial year 2022-23 is 7.10% per annum (as per SBI's rates for loans for the purpose of valuation of perquisites under Income Tax Rules). This rate may vary slightly depending on updates from the SBI or the specific period for which the loan was outstanding during the year.
Therefore, for the financial year 2022-23 (AY 2023-24), the effective rate of interest for valuation of perquisite in respect of interest-free or concessional loan would be 7.10% per annum, unless there are subsequent changes in the SBI's lending rates that would be applicable for such valuations. It's advisable to check the latest rates or consult with a tax advisor for any updates or specific calculations related to this valuation.
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