Chartered Accountant
89 Points
Posted on 11 June 2015
Perquisite is defined under section 17 of the Income Tax Act 1961. As per section 17 perquisite means
a) Value of rent free accomodation provided to the assessee by his employer.
b) the value of any concession in the matter of rent respecting any accomodation provided to the assessee by his employer.
In your case, to determine whether the CLA provided by the employer to employee is perquisite or not I need more information, which are following
1) Whether employer is Central or State govt. or non govt,
2) Whether accomodation is furnished or not
3) If it is furnished 10% of the cost of furniture and fittings.Furniture includes Television sets, Radio sets, refrigerator,other household appliances, a.c, or other similar gadgets or appliances.If the furniture provided is gired from third party hire charges paid to the third party.
4) Do employer owns the property or not, It is not clearly stated in the query else than specifying rent paid.
5)The population of the city of the employer as per 2001 census in case accomodation is owned by employer
6) Whether accomodation is provided in a hotel or not?
7) Actual amount of salary. Salary means basic pay, allowances, bonus or commission
payable monthly or otherwise or any monetary payment, by whatever name called, from one or more employers, as the case may be, but does not include the following, namely:
(a) dearness allowance or dearness pay unless it enters into the computation of superannuation or retirement benefits of the employee concerned;
(b) employer’s contribution to the provident fund account of the employee;
(c) allowances which are exempted from the payment of tax;
- these informations must be needed to know whether it is perquisite or not.
-If it is a perquisite it is taxable.So to know whether CLA deducted from salary is perquisite or not I need above pointed informations.
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