What is computation of income tax?
The process of determining the different sources of Income is called ‘Computation of Income’. While computing income, the different incomes are finally grouped as “Gross Total Income”. After computing income, the tax is computed based on the income tax rate applicable and the various income tax deductions allowable.
What is tax free perquisite?
A perquisite refers to any form of non-cash remuneration made available by an employer to an employee. Perquisites provided by an employer to an employee are taxable under the head of income known as Income from Salaries. However, some types of perquisites are tax-free in the hands of the employee.
How are perquisites treated for income tax purposes?
As per the provisions of the income tax act, perquisite includes: The value of rent-free accommodation/concessional rent accommodation provided to the employee by his employer. The value of any benefit or amenity granted or provided free of cost or at concessional rate in certain specified cases.
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What are the examples of tax-free perquisites?
List of Tax-Free Perquisites – Income Tax Act
- Medical Facilities & Reimbursements.
- Recreational Facilities.
- Traininghttps://
- Telephone & Laptops.
- Education for Children.
- Food and Beverage.
- Loan to Employees.
- Insurance Premium & Pension Contributions.
What is meant by perquisites give five examples of tax free perquisites?
An insurance premium paid by an employer on an accident policy taken out for the employee is a tax-free perquisite. Also, employers contribution to the superannuation fund of the employee provided such contribution does not exceed Rs. 1,50,000 per employee per year can be treated as a tax-free perquisite.
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What are the types of perquisites in income tax?
Perquisites Taxable for specified employees:
- Motor Car,
- Gas, electricity and water,
- Transport,
- Free education to employee’s children in employer’s institution,
- Sweeper, watchman, gardener, etc.,
- Refrigerator, heater, etc.,
- Facilities of free boarding and lodging at Holiday Homes,
- Issue of shares at a concessional price,
