Section 17(1)

For the purposes of this Part, “perquisite” includes—

(a) value of rent-free accommodation provided to the assessee by his employer computed in such manner as may be prescribed

(b) value of any accommodation provided to the assessee by his employer at a concessional rate which is in excess of rent recoverable from or payable by the assessee computed in such manner as may be prescribed;

(c) value of any benefit or amenity granted or provided free of cost or at concessional rate in the following cases: —

(i) by a company to an employee,

who is a director thereof or

who has a substantial interest in the company;

(ii) by any employer (including a company) to an employee [other than employee referred in sub-clause (i)] whose income under the head “Salaries” by way of monetary payment (from one or more employers) exceeds such amount as may be prescribed;

(d) value of any specified security or sweat equity shares allotted or transferred, directly or indirectly, by the current employer, or former employer, free of cost or at concessional rate to the assessee;

(e) value of any other benefit or amenity, as may be prescribed [R-15(5)];

(f) any sum paid by the employer in respect of any obligation which, but for such payment, would have been payable by the assessee;

(g) any sum payable by the employer to affect an assurance on the life of the assessed or to affect a contract for an annuity, whether directly or through a fund, other than–

(i) a recognized provident fund; or

(ii) an approved superannuation fund; or

(iii) a Deposit-linked Insurance Fund established under–

(A) section 3G of the Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948; or

(B) section 6C of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952;

(h) aggregate amount of any contribution, in excess of ₹75,00,00 in a tax year, made to the account of the assessee by the employer—

(i) in a recognized provident fund;

(ii) in the scheme referred to in section 124(1); and

(iii) in an approved superannuation fund;

(i) the annual accretion by way of interest, dividend or any other amount of similar nature during the tax year to the balance at the credit of the fund or scheme referred to in clause (h), computed in such manner, as may be prescribed (to the extent it relates to the contribution referred to in the said clause in any tax year)

Rule 15(1)

For the purpose of computing the income chargeable under the head "Salaries",

value of perquisites provided by the employer, either directly or indirectly,

to the assessee (herein referred to as the employee) or

to any member of his household

by reason of his employment,

shall be determined in accordance with the provisions of this rule.

Rule 15(8)(k)

For the purpose of this rule

salary" includes the 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: —

(i) dearness allowance or dearness pay, unless it enters into the computation of superannuation or retirement benefits of the employee concerned;

(ii) employer's contribution to the provident fund account of the employee;

(iii) allowances, which are exempted from payment of tax;

(iv) the value of perquisites specified in section 17(1);

(v) any payment or expenditure specifically excluded u/s 17(2); and

(vi) lump-sum payments received at the time of termination of service or superannuation or voluntary retirement, like gratuity, severance pay, leave encashment, voluntary retrenchment benefits, commutation of pension and similar payments;

Rule 15(6)

For the purposes of section 17(1)(d), FMV of any specified security or sweat equity share, being an equity share in a company, on the date on which the option is exercised by the employee, shall be determined as follows: –

(a) in a case where, on the date of the exercising of the option, the share in the company is listed on a recognised stock exchange, the fair market value shall be the average of the opening price and closing price of the share on that date on the said stock exchange, subject to the provisions of clause (b);

(b) in a case where, on the date of exercising of the option, the share is listed on more than one recognised stock exchanges, the fair market value shall be the average of the opening price and closing price of the share on the recognised stock exchange which records the highest volume of trading in the share;

(c) in a case where, on the date of exercising of the option, there is no trading in the share on any recognized stock exchange, the fair market value shall be—

(i) the closing price of the share on any recognised stock exchange on a date closest to the date of exercising of the option and immediately preceding such date; or

(ii) the closing price of the share on a recognised stock exchange, which records the highest volume of trading in such share, if the closing price, as on the date closest to the date of exercising of the option and immediately preceding such date, is recorded on more than one recognised stock exchange;

(d) in a case where, on the date of exercising of the option, the share in the company is not listed on a recognised stock exchange, the fair market value shall be such value of the share in the company as determined by a merchant banker on the specified date

Rule 15(7)

For the purposes of section 17(1)(d), FMV of any specified security, not being an equity share in a company,

on the date on which the option is exercised by the employee, shall be such value as may be determined by a merchant banker on the specified date

Rule 15(2)(a)

For the purpose of section 17(1)(a) and (b),

value of residential accommodation provided by the employer during the tax year,

in the circumstances referred in column B

shall be determined in accordance with the column C or D

[Relevant Period] = Period during which the said accommodation was occupied by the employee during the tax year

Rule 15(8)(a)

For the purpose of this rule

"accommodation" includes a house, flat, farm house or part thereof, or accommodation in a hotel, motel, service apartment, guest house, caravan, mobile home, ship or other floating structure;

Circumstances

Value of Unfurnished Accommodation

B

C

Accommodation is provided by CG or SG, to the employees

either holding office or post in connection with the affairs of the Union or State.

License fee determined by the CG or SG in accordance with the rules framed by such Government

(-) rent actually paid by the employee.

Circumstances

Value of Unfurnished Accommodation

B

C

(a) Accommodation is owned by employer

(i) Cities having population > 40 lakhs as per 2011 census

10% of salary in in respect of relevant period

(-) rent, actually paid by employee;

(ii) Cities having population > 15 lakh ≤ 40 lakh as per 2011 census

7.5% of salary in respect of relevant period

(-) rent, if any, actually paid by employee; and

(iii) in other areas

5% of salary in respect of relevant period

(-) rent, if any, actually paid by employee;

(b) Accommodation is taken on lease or rent by employer

Actual lease rental paid or payable by the employer or

10% of salary in respect of relevant period,

whichever is lower,

(-) rent, if any, actually paid by the employee.

Rule 15(2)(e)

 .

Furniture includes

Television sets, radio sets, refrigerators, other household appliances, air-conditioning plant or equipment

Circumstances

Value of furnished Accommodation

B

D

Accommodation is provided specified in SN (1) or (2) in a hotel

(except

where such accommodation is provided for a period not exceeding in aggregate 15 days on transfer of employee from one place to another)

Actual charges paid or payable to such hotel or

24% of salary paid or payable for the tax year for relevant period,

whichever is lower,

(-) Rent, if any, actually paid or payable by the employee

Rule 15(8)(d)

"hotel" includes licensed accommodation in the nature of motel, service apartment or guest house;

Rule 15(2)(b)

The provisions of this sub-rule shall not apply to any accommodation temporarily provided to an employee

Working at a mining site or an on-shore oil exploration site or a project execution site, or a dam site or a power generation site or an off-shore site; which —

(i) having plinth area not exceeding 1000 square feet, is located not less than 8 km away from the local limits of any municipality or a cantonment board; or

(ii) is located in a remote area.

Rule 15(2)(c)

Where on account of transfer of an employee from one place to another,

he is provided with accommodation at the new place of posting while retaining the accommodation at the other place,

the value of perquisite

shall be determined with reference to only one such accommodation which has the lower value with reference to Table I for a period not exceeding 90 days and thereafter

shall be charged for both such accommodations as provided in the said Table I.

Rule 15(2)(d)

Where the accommodation is owned or taken on lease or rent by the employer and

the same accommodation is continued to be provided to the same employee for more than one tax year,

the amount calculated in accordance with Table I: SN 2(a) or (b) shall not exceed

.

Rule 15(2)(g)

For the purposes of clause (d);

(i) "Cost Inflation Index (CII)" means the index as may be notified by the CG u/s 72(8)(a);

(ii) "first tax year" means

the tax year 2023-2024, or

the tax year in which the accommodation was provided to the employee,

whichever is later.

Rule 15(2)(f)

For the purposes of this sub-rule,

where the accommodation is provided by the CG or SG to an employee, who is serving on deputation with anybody or undertaking under the control of such Government, —

(i) the employer of such an employee shall be deemed to be that body or undertaking where the employee is serving on deputation; and

(ii) the value of perquisite of such an accommodation shall be the amount calculated in accordance with Table 1: Sl. No. 2(a), as if the accommodation is owned by the employer

Rule 15(3)(a)

Value of perquisite for use of motor provided by an employer,

in the circumstances as referred in column B of the following Table II,

shall be determined in accordance with column C or column D thereof, as the case may be:

Table II provides VALUE OF PERQUISITE PER CALENDAR MONTH

Circumstances

CC of engine <= 1.6 litres or motor car is an electric vehicle

CC of engine > 1.6 litres

B

C

D

(a) Car is used wholly and exclusively for official duties

No value

If documents specified in rule (3)(c) are maintained by the employer

Similar to Column C

(b) Car is used exclusively for personal or private purposes of

the employee or

any member of his household

and

running and maintenance expenses are met or reimbursed by the employer;

Actual amount of expenditure incurred by the employer on the running and maintenance of motor car during the relevant tax year

including

Remuneration, if any, paid by the employer to the chauffeur

as increased by

Normal wear and tear of the motor car

[i.e. 10% p.a. of the actual cost of motor car [R-(3)(d]]

as reduced by

any amount charged from the employee for such use.

Similar to Column C

(c) Car is used partly for official duties and partly for personal or private purposes of his own or any member of his household and—

(i) expenses on running & maintenance are met or reimbursed by the employer;

Rs. 5,000

(+ Rs.3,000, if chauffeur is also provided to run the motor car by the employer)

Rs. 7,000

(+ Rs. 3,000, if chauffeur is also provided to run the motor car by the employer);

(ii) expenses on running and maintenance for personal use are fully met by the assessee.

Rs. 2,000

(+ Rs. 3,000, if chauffeur is also provided by the employer).

Rs. 3,000

(+ Rs. 3,000, if chauffeur is also provided by the employer).

Rule 15(3)(d)

For the purposes of this sub-rule,

the normal wear and tear of a motor car shall be taken at 10% p.a. of the actual cost of the motor car or cars.

Circumstances

Running and maintenance charges (including chauffeur’ remuneration, if any) are met or reimbursed by the employer

CC of engine <= 1.6 litres or motor car is an electric vehicle

CC of engine > 1.6 litres

B

C

D

(a) Such reimbursement is for the use of the vehicle wholly and exclusively for official purposes;

No value, if the documents specified in rule (3)(c) are maintained by the employer

Similar to Column C

(b) Such reimbursement is for the use of the vehicle partly for official purposes and partly for personal or private purposes of the employee or any member of his household.

Actual amount of expenditure incurred by the employer

(-) amount specified in SN (1)(c)(i) above, if the conditions mentioned in rule (3)(c) are fulfilled.

Similar to Column C

Circumstances

Running and maintenance charges are met or reimbursed by the employer

CC of engine <= 1.6 litres or motor car is an electric vehicle

B

C

(a) Such reimbursement is for the use of the vehicle wholly and exclusively for official purposes;

no value, if the documents specified in Rule (3)(c) are maintained by the employer

(b) such reimbursement is for the use of vehicle partly for official purposes and partly for personal or private purposes of the employee.

the actual amount of expenditure incurred by the employer

(-) Rs. 3,000 if the conditions mentioned in rule (3)(c) are fulfilled.

Rule 15(3)(b)

Where an employer owns or hires one or more motor cars

and allows the employee or any member of his household to use them for the purposes other than wholly and exclusively in the performance of his duties,

value of perquisite shall be the amount calculated as below:

(i) for one car, in accordance with Table II: SN (1)(c)(i); and

(ii) for other cars, in accordance with Table II: Sl. No. (1)(b).

Rule 15(3)(c)

If the employer or employee claims that

the motor vehicle is used solely for official duties or

the actual expenses for running and maintaining the employee-owned motor vehicle for official purposes exceed the deductible amounts in Table II: SN 2(b) or 3(b),

he may claim a higher amount for official use and in this case, the value of the perquisite shall be

actual amount of expenses paid or reimbursed by the employer,

(-) the higher amount attributed to official use of the vehicle provided that the following conditions are fulfilled: —

(i) the employer has maintained complete details of journey undertaken for official purpose which may include date of journey, destination, mileage and the amount of expenditure incurred thereon; and

(ii) the employer gives a certificate to the effect that the expenditure was incurred wholly and exclusively for the performance of official duties.

Rule 15(4)

The value of benefit provided by the employer to

the employee or

any member of his household

for goods, services or utilities, as referred to in column B of the following Table III,

shall be computed in accordance with column C thereof:

SN

Nature of goods, services or utilities

Value of benefit of the goods, services or utilities provided

A

B

C

1.

Services of a sweeper, a gardener, a watchman or a personal attendant.

Salary paid or payable by the employer or any other person on his behalf for such services

(-) any amount paid by the employee for such services.

2

Supply of gas, electric energy or water for the consumption of the employee‘s household

(a) by purchasing them from any outside agency.

Amount paid by the employer for such supply

(-) any amount paid by the employee for such supply

(b) made from resources owned by the employer, without purchasing them from any outside agency

Manufacturing cost per unit incurred by the employer,

(-) any amount paid by the employee for such supply

3

Provision of free or concessional educational facilities for any member of the employee‘s household

(a) in outside educational institution

Expenditure incurred by the employer in this regard

(-) any amount paid by employee on that account

(b) In educational institution maintained and owned by the employer

 Cost of such education in a similar institution in or near the locality,

(-) any amount paid by employee on that account,

where the cost of such education or value of such benefit per child exceeds ₹3,000 per month.

(c) In any other educational institution by reason of his employment

Cost of such education in a similar institution in or near the locality,

(-) any amount paid by employee on that account,

where the cost of such education or value of such benefit per child exceeds ₹3,000 per month.

4.

Provision by an employer who is engaged in the carriage of passengers or goods,

to any employee (not being an employee of an airline or the railways) or

to any member of his household,

for personal or private journey free of cost or at concessional fare,

in any conveyance owned, leased or made available by any other arrangement by such employer for the purpose of transport of passengers or goods.

Value at which such benefit or amenity is offered by such employer to the public

(-) the amount, if any, paid by the employee for such benefit or amenity.

Rule 15(5)(a)

In terms of provisions contained in section 17(1)(e),

value of other benefits or amenities of the nature referred to in Column B of Table IV

shall be determined in accordance with column C

and subject to conditions provided in Column D thereof:

SN

Nature of other benefits or amenities

Value of perquisite

Conditions

A

B

C

D

1.

Interest-free or concessional loan for any purpose made available to

the employee or

any member of his household

during the relevant tax year by the employer or any person on his behalf.

Interest computed at the annual rate charged by the SBI constituted under the SBI Act, 1955, as on the 1st day of the relevant tax year in respect of loans by the bank for the same purpose, using the maximum outstanding monthly balance

(-) interest, if any, actually paid by him or any such member of his household

(a) No value would be charged

if such loans are made available for medical treatment in respect of diseases specified in rule 18 or

where the amount of loans is not exceeding ₹2,00,000 in the aggregate; and

(b) where the benefit relates to the loans made available for medical treatment referred to in clause (a), the exemption so provided shall not apply to so much of the loan as has been reimbursed to the employee under any medical insurance scheme

2.

Value of travelling, touring, accommodation and any other expenses paid for or borne or reimbursed by the employer for any holiday availed of by

the employee or

any member of his household,

other than concession or assistance referred to in rule 277.

Amount equal to expenditure incurred by such employer in that behalf.

(a) Where such facility is maintained by the employer, and is not available uniformly to all employees,

value of benefit shall be taken to be the value at which such facilities are offered by other agencies to the public; or

(b) where the employee is on official tour and the expenses are incurred in respect of any member of his household accompanying him, the amount of expenditure so incurred shall be an amenity; or

(c) where any official tour is extended as a vacation, the value of such fringe benefit shall be limited to the expenses incurred in relation to such extended period of stay or vacation

(-) Amount, if any, paid by employee for such benefit or amenity

3.

The value of free food and non-alcoholic beverages provided by the employer to an employee.

Amount of expenditure incurred by employer

(-) amount, if any, paid by the employee for such benefit or amenity.

This provision shall not apply to

(a) free food and non-alcoholic beverages provided by such employer during working hours at office or business premises or through paid vouchers usable only at eating joints, to the extent the value thereof in either case does not exceed ₹200 per meal; or

(b) tea or snacks provided during working hours; or

(c) free food and non-alcoholic beverages during working hours provided in a remote area or an off-shore installation.

4.

The value of any gift, or voucher, or token (in lieu of gift) received by

the employee or

member of his household

on ceremonial occasions or otherwise from the employer.

Amount of such gift

It shall be nil, if the value of such gift, voucher or token, 

is below ₹ 15,000 in aggregate during the tax year.

5.

The amount of expenses including membership fees and annual fees incurred by the employee or any member of his household, which is charged to a credit card (including any add-on-card) provided by the employer, or otherwise, paid for or reimbursed by such employer.

It shall be the amount taken to be the value of perquisite chargeable to tax

(-) amount, if any paid by employee for such benefit or amenity

There shall be no value of such benefit, where expenses are incurred wholly and exclusively for official purposes and the conditions specified in rule (5)(b) are fulfilled.

6.

The value of benefit to the employee resulting from the payment or reimbursement by the employer of any expenditure incurred (including the amount of annual or periodical fee) in a club by him or by a member of his household.

Actual amount of expenditure incurred or reimbursed by such employer on that account

(-) amount, if any paid by employee for such benefit or amenity.

(a) Where the employer has obtained corporate membership of the club and the facility is enjoyed by the employee or any member of his household, the value of perquisite shall not include the initial fee paid for acquiring such corporate membership; and

(b) the provision given in column C of SN 6 shall not apply, if such expenditure is incurred wholly and exclusively for business purposes and the following conditions are fulfilled: –

(i) conditions in rule (5)(b) are fulfilled; and

(ii) use of health club, sports and similar facilities are provided uniformly to all employees by the employer.

7.

Value of benefit resulting from the use by

the employee or

any member of his household

of any movable asset

(other than assets already specified in this rule and other than laptops, computers, tablets and mobile phones)

belonging to the employer or hired by him.

10% p.a. of the actual cost of such asset or

the amount of rent or charge paid by the employer,

(-) amount, if any, paid by employee for such use.

NA

8.

Value of benefit arising from the transfer of any movable asset belonging to the employer directly or indirectly to

the employee or

any member of his household.

Actual cost of such assets to the employer

(-) Cost of normal wear and tear

(-) Amount, if any, paid by employee being the consideration for such transfer.

The cost of normal wear and tear shall be calculated at the rate of

(a) 50% in case of computers and electronic items, by reducing balance method;

(b) 20% in the case of motor cars, by reducing balance method; and

(c) 10% in case of other assets,

of the cost of the asset for each completed year during which such asset was put to use by the employer.

9.

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

except expenses on telephones, including a mobile phone.

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

(-) employee's contribution, if any.

Rule 15(5)(b)

For the purposes of clause (a) of Table IV: SN 5 and 6 .C, the following conditions need to be satisfied: –

(i) complete details in respect of such expenditure are maintained by the employer which may, inter alia, include the date of expenditure and the nature of expenditure;

(ii) the employer gives a certificate for such expenditure to the effect that the same was incurred wholly and exclusively for the performance of official duties.

Rule 15(8)

(b) "closing price" of a share on a recognised stock exchange on a date shall be the price of the last settlement on such date on such stock exchange, and where the stock exchange quotes both "buy" and "sell" prices, the closing price shall be the "sell" price of the last settlement;

(h) "opening price" of a share on a recognised stock exchange on a date shall be the price of the first settlement on such date on such stock exchange and where the stock exchange quotes both "buy" and "sell" prices, the opening price shall be the "sell" price of the first settlement;

(l) "specified date" means—

(i) the date of exercising of the option; or

(ii) any date earlier than the date of the exercising of the option, not being a date which is more than one hundred and eighty days earlier than the date of the exercising.

Section 17(2)

1. value of any medical treatment provided to

an employee or

any member of his family

in any hospital maintained by the employer;

(b) any sum paid by the employer in respect of any expenditure incurred by the employee on his medical treatment or treatment of any member of his family—

(i) in any hospital maintained by the Government, or any local authority, or any other hospital approved by the Government for the purposes of medical treatment of its employees;

(ii) in respect of the prescribed diseases or ailments, in any hospital approved by the Principal Chief Commissioner or Chief Commissioner having regard to such guidelines as may be issued in this behalf;

Section 17(2)

Nothing in sub-section (1) shall apply to–

(c) any portion of the premium paid by an employer to effect or to keep in force an insurance on the health of employee under any scheme approved, for the purposes of section 30(c), by the–

(i) Central Government; or

(ii) IRDA established u/s 3(1) of the IRDA Act, 1999;

(d) any sum paid by the employer in respect of any premium paid by the employee to effect or to keep in force an insurance on his health or the health of any member of his family under any scheme, approved for the purposes of section 126, by the—

(i) Central Government; or

(ii) IRDA;

Section 17(2)(f)

Nothing in sub-section (1) shall apply to–

any expenditure incurred or reimbursed by the employer in respect of any expenditure actually incurred by the employee, on—

(i) medical treatment of the employee or any family member of such employee outside India;

(ii) travel and stay abroad for the employee or any member of the family of such employee for medical treatment;

(iii) travel and stay abroad of one attendant who accompanies the patient in connection with such treatment

Section 17(3)

For the purposes of sub-section (2)(f),

(a) the expenditure on medical treatment and stay abroad shall be excluded from the perquisite only to the extent permitted by the RBI; and

(b) the expenditure on travel shall be excluded from perquisite only in the case of an employee whose gross total income, as computed before including therein the said expenditure, does not exceed such amount as may be prescribed.

Section 17(2)

Nothing in sub-section (1) shall apply to

(e) any expenditure incurred by the employer for the use of any vehicle for journey by the assessee from his residence to his office or other place of work, or from such office or place to his residence;