Journal entry regarding perquisites

can anyone tell me that what will be the journal entry of perquisites provided by employer to employee, in the books of employer and in the books of employee as well? (eg. car exps.)

Replies (5)

employer can claim it as an expense under employee benifits given

CAR ALLOWANCWE DR

To Employeee

 

this perquisite is added in salary of employee ,employee take the benefit as per income tac act

dear valji,

if this entry would be made then it will stand in the name of employee. How will we write off this afterwards.

Dear Aditya nd valji,

 

Valuation of perquisite is made on the basis of per calender month (Rs. 2400 per month), in this case how will we recognise that in books while we are already showing the actual expense of car in Profit & loss a/c.

if you debited actual expenses debited to profit & loss account then not added to employee salary

then  create hard car expenses-MR A(Employee),Car expenses  (MR B) debit to profit & loss accouts

if  you given to employee then also allowed as exepnses if directly debited actual expenses then also allowed as exepses .it not make diffreance for the company

if you pay fixed allowance per month for example rs 2400 but actau expeses of employee is rs 2200 then RS 200 is taxable in the hand of employee

 

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