{"id":7926,"date":"2025-07-16T12:37:47","date_gmt":"2025-07-16T12:37:47","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/?post_type=glossary&p=7926"},"modified":"2025-07-16T12:37:48","modified_gmt":"2025-07-16T12:37:48","slug":"taxability-of-perquisites","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/taxability-of-perquisites\/","title":{"rendered":"Taxability of Perquisites"},"content":{"rendered":"

Perquisites—also called “perks”—are extra benefits your employer gives you, apart from your salary. They can be in cash or kind, like a company car, rent-free home, or school fees paid by your company. As per Section 17(2) of the Income Tax Act<\/a>, these count as part of your salary income and may be tax<\/a>able.<\/p>\n\n\n\n

Classification of Perquisites<\/h2>\n\n\n\n

Perquisites fall into three main categories:<\/p>\n\n\n\n

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  1. Fully taxable for all employees<\/strong>
    These include benefits like rent-free or concessional accommodation, payment of your personal obligations (e.g., interest-free loans, school fees), employer-funded club memberships, and share-based benefits.<\/li>\n\n\n\n
  2. Taxable only for specified employees<\/strong>
    Perks such as free amenities, concessional benefits, or domestic servant services given to directors or high-income individuals are taxable only for them.<\/li>\n\n\n\n
  3. Tax-exempt perquisites<\/strong>
    Some perks are non-taxable up to limits, such as laptops\/phones for work, refreshments at office, employer’s contribution to provident fund (up to ₹7.5 lakh), medical benefits, and travel allowances.<\/li>\n<\/ol>\n\n\n\n

    Taxability Rules & Valuation<\/h2>\n\n\n\n