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Use of mobile by employees, a taxable perquisite???

K. Rawat (student) (96 Points)

04 February 2013

An employee has been provided a mobile by the organisation. is this a taxable perquisite for him??

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6 Replies

Vaisakh Ayyappan Prakash(VAP) (student) (474 Points)
Replied 04 February 2013

8a Treatment of any other benefit, amenity, etc. provided by the employer [Rule

3(7)(ix)]

Rule 3(7)(ix) is applicable to all employees. As per this rule:

The value of any other benefit or amenity, service, right or privilege provided by the employer

shall be determined on the basis of cost to the employer under an arm's length transaction as

reduced by the employee's contribution, if any.

However, nothing contained in this item shall apply to the expenses on telephones including a

mobile phone actually incurred on behalf of the employee by the employer

expenses on mobile phones are tax free perquisites

hope it helps

Harish (CA Student) (568 Points)
Replied 04 February 2013

As concern as my knowledge, Mobiles given by Employer to Employee is not a taxable perquisite.

1 Like

@VaibhavJ (Believe!! Live your dreams!) (33511 Points)
Replied 04 February 2013

Till he is in services its not taxable, however on leaving co. he has to surrender mobile forn bak to co. If he isnt surrendering mobile phone then WDV of mobile fone is chargeable as perquisite.

Thanks!!

sachin (MBA) (32 Points)
Replied 05 February 2013

Any communication tool ?(laptop/phone) given by the company to carry its responsilities are company assets. If due to expiry life cycle of a equipment which is 3 years or such , company allows it to handover to the employee it is NON TAXABLE.

Yes if in between the employee leaves and wants to take it with him, based on rules the appropriate amount had to be given to company. (different for different companies)

Procurement with in 6 months - 100%, between 6 months to 1 year - 75%, after 1 year to 2 year - 50% and so on. However policies are not defined in case an employee is given an OLD asset.

CA Harish Negi (Never Say Die) (860 Points)
Replied 05 February 2013

Perquisites not taxable in all cases

The following perquisites are not taxable under CBDT instructions or by virtue of the Act/Rules:

i. The provision of medical facilities as per para 4(i).

ii. Free meals provided to all employees in office up to Rs. 50 per employee provided by the employer through paid vouchers usable at eating joints.

iii. Telephone including mobile phone provided to the employee.

iv. Perquisites allowed outside India by the Government to a citizen of India for rendering services outside India.

v. Sum payable by an employer to pension or deferred annuity scheme.

vi. Employer’s contribution to staff group insurance scheme.

vii. Actual travelling expenses paid/reimbursed for journeys undertaken for business purposes.

viii. Payment of annual premium on personal accident policy, if such policy is taken to safeguard the employer’s interest. See CIT vs. Lala Shri Dhar (1922) 84 ITR 192 (Delhi).

ix. Rent-free official residence to a High Court or Supreme Court Judge.

x. Rent-free furnished residence to official of Parliament.

xi. Conveyance facility to High Court/Supreme Court Judges.

shiv shankar rawat student CMA (Manager) (263 Points)
Replied 06 August 2013

Dear All

Any type of asset which are use by employee (Like......lap top , telephone and etc which is require for smooth work function ) not consider under perquisite.

Rgds

Shiv