Taxation under the head Salaries

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This discussion clarifies how perquisites like free meals and interest-free loans are taxed under different income tax regimes. Under the new tax regime, free meals are taxable, while the old regime offers a limited exemption. Interest-free loans may be exempt if the total loan amount is below a certain threshold. Tax paid by the employer on perquisites is often exempt under Section 10(10CC). Importantly, HRA exemption is not available under the new tax regime.

ARITRA CHAKRABORTY

ARITRA CHAKRABORTY (Querist)
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22 June 2025 My father is under PSU sector. His annual Income is 36 Lakhs for PY 2024-25. He is having below perquisites:

Free Meal 48,955
Interest free loan 2,544
Income tax on monetary & non-monetary perquisites 17,619
Tax paid by employer on behalf of employee u/s 192(1A) 23,116.

Can he claim exemption on these above items u/s 10?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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23 June 2025 Free Meal: Will be taxable if your father opts for the New Tax Regime. Under the Old Tax Regime, an exemption of ₹ 50 per meal is available.
Interest-free loan: Likely exempt if the total outstanding loan amount (not just the perquisite value) for the year is less than ₹ 20,000, or if it's for specified medical treatment. Since the perquisite value is ₹ 2,544, the actual loan amount might be higher, so this needs clarification. If the actual loan amount is small and within the limit, then the perquisite value on it is exempt.
Income tax on monetary & non-monetary perquisites & Tax paid by employer u/s 192(1A): These amounts are likely to be exempt under Section 10(10CC), provided they represent tax paid by the employer on non-monetary perquisites.

The employer will issue Form 16, which will clearly show how these perquisites are valued and whether any tax has been deducted on them. It will also indicate the chosen tax regime.

ARITRA CHAKRABORTY

ARITRA CHAKRABORTY (Querist)
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23 June 2025 Sir,
My father's IT has been calculated under new tax regime. But there is no break up of Basic DA HRA, hence I can't even claim for HRA exemption

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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23 June 2025 HRA exemption is NOT allowed under the new tax regime.
Under new tax regime Tax liability is calculated over gross salary including DA & HRA.

ARITRA CHAKRABORTY

ARITRA CHAKRABORTY (Querist)
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23 June 2025 Thank you so much Sir

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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23 June 2025 You are welcome.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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27 September 2025 Good luck..

ARITRA CHAKRABORTY

ARITRA CHAKRABORTY (Querist)
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27 September 2025 Thank you so much sir for your response