Perquisites
The term ‘perquisite’ indicates some extra benefit in addition to the amount that may be legally due
by way of contract for services rendered. In modern times, the salary package of an employee
normally includes monetary salary and perquisite like housing, car etc.
Perquisite may be provided in cash or in kind.
Reimbursement of expenses incurred in the official discharge of duties is not a perquisite.
Perquisite may arise in the course of employment or in the course of profession. If it arises from a
relationship of employer-employee, then the value of the perquisite is taxable as salary. However, if
it arises during the course of profession, the value of such perquisite is chargeable as profits and
gains of business or profession.
Perquisite will become taxable only if it has a legal origin. An unauthorised advantage taken by an
employee without his employer’s sanction cannot be considered as a perquisite under the Act.
The term ‘perquisite’ indicates some extra benefit in addition to the amount that may be legally due
by way of contract for services rendered. In modern times, the salary package of an employee
normally includes monetary salary and perquisite like housing, car etc.
Perquisite may be provided in cash or in kind.
Reimbursement of expenses incurred in the official discharge of duties is not a perquisite.
Perquisite may arise in the course of employment or in the course of profession. If it arises from a
relationship of employer-employee, then the value of the perquisite is taxable as salary. However, if
it arises during the course of profession, the value of such perquisite is chargeable as profits and
gains of business or profession.
Perquisite will become taxable only if it has a legal origin. An unauthorised advantage taken by an
employee without his employer’s sanction cannot be considered as a perquisite under the Act.
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