Use of Movable Assets

The value of benefit to the employee 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 and computers) belonging to the employer or hired by him shall be determined at 10% per annum of the actual cost of such asset or the amount of rent or charge paid or payable by the employer, as the case may be, as reduced by the amount, if any, paid or recovered from the employee for such use.

Transfer of Movable Assets

The value of benefit to the employee resulting from the use by him or any member of his household of any movable asset (other than assets already specified in Rule 3 and other than laptops and computers) belonging to the employer or hired by him shall be determined at 10% per annum of the actual cost of such asset or the amount of rent or charge paid or payable by the employer, as the case may be, as reduced by the amount, if any, paid or recovered from the employee for such use.

The value of benefit to the employee arising from the transfer of any movable asset belonging to the employer directly or indirectly to the employee or any member of his household shall be determined to be the amount representing the actual cost of such asset to the employer as reduced by the cost of normal wear and tear calculated at the rate of 10% of such cost for each completed year during which such asset was put to use by the employer and as further reduced by the amount, if any, paid or recovered from the employee being the consideration for such transfer:

Provided that in the case of computers and electronic items, the normal wear and tear would be calculated at the rate of 50% and in the case of motor cars at the rate of 20% by the reducing balance method.

Any Other Benefit or Amenity, Service, Right or Privilege

The value of any other benefit or amenity, service, right or privilege provided by the employer shall be determined on the basis of cost to the employer under an arms length transaction as reduced by the employees contribution, if any:

Provided that nothing contained in this clause shall apply to the expenses on telephones including a mobile phone actually incurred on behalf of the employee by the employer.

Perquisites Exempt from Income Tax

Some instances of perquisites exempt from tax are given below: Provision of medical facilities {Proviso to Sec. 17(2)]:

Value of medical treatment in any hospital maintained by the Government or any local authority or by the employer or approved by the employer or approved by the Chief Commissioner of Income-tax. Besides, any sum paid by the employer towards medical reimbursement other than as discussed above is exempt upto Rs. 15,000/-.

No perquisite shall arise if interest free/concessional loans are made available for medical treatment of specified diseases in Rule 3A or where the loan is petty not exceeding in the aggregate Rs. 20,000/-

No perquisite shall arise in relation to expenses on telephones including a mobile phone incurred on behalf of the employee by the employer.

Rent free official residence provided to a judge of High Court or Supreme Court or an Officer of parliament, Union Minister or Leader of Opposition.

Perquisites allowed outside India by the Government to a citizen of India for rendering services outside India (Sec. 10(7))