The CBDT had on Friday notified new Rules for valuation of perquisites provided by employers to employees, which will be applicable with effect from1-4-2009. This comes after the abolition of Fringe Benefit Tax and the perquisites becoming taxable in the hands of employees.
The value of perquisite provided to the employee will now be added in his Total Income and will be thus be taxable, depending upon the tax bracket applicable to the employee.
As the new rule is applicable retrospectively from 1-4-2009, the entire tax liability from 1-4-2009 is to be recovered in the remaining three months, in case the employer has not deducted tax so far.
The government has retained the old Rules of valuation of perquisites that were applicable before FBT came into force, except a few changes in case of Cars and Food vouchers. The Value of meal in case of food vouchers has been fixed at Rs. 50/- apiece.
Cars with engine capacity of less than 1.6 lts. will have a value of Rs. 1800 per month, while cars with engine capacity exceeding 1.6 lts. will be valued at Rs. 2400 per month, where the running & maintenance expenses are re-imbursed by the employer. In case such expenses are borne by the employee, the value of car with engine capacity less than 1.6 lts. will be Rs. 600 per month and that of engine capacity more than 1.6 lts. will be Rs. 900 per month. Another Rs. 900 per month will be added in case the employee is also provided a chaufeur.
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