INTERVIEW QUESTIONS TAX PERQUISITE TAX DETAILS

Question: What are different types of Perquisites based on the level of taxes applicable on them?

Answer: Depending upon the tax that is levied on perquisites these can be classified into the following three heads:-

Taxable Perquisites:

Some of the perquisites that are taxable in nature are rent-free accommodation, supply of gas, water and electricity, professional tax of employee, reimbursement of medical expense, and salary of servant employed by employee. Taxable perquisites also include any other fringe benefit provided by employer to employee like free meals, gifts exceeding Rs.5000, club and gym facilities etc.

Exempted Perquisites:

Non-taxable fringe benefits include travel allowance, computer or laptop provided by the company for official use, refreshment provided by employer during office hours, provision of medical aid, use of health club, sports club, telephone lines, interest free salary loan provided by employer to employees, contribution to provident fund by employers, free medical and recreational facilities and so on.

Perquisites taxable only by employees: This type of perquisites include car owned by company but sued by employee, education facility for children, service of domestic servant etc.

Depending upon the tax that is levied on perquisites these can be classified into the following three heads:-

Taxable Perquisites:

Some of the perquisites that are taxable in nature are rent-free accommodation, supply of gas, water and electricity, professional tax of employee, reimbursement of medical expense, and salary of servant employed by employee. Taxable perquisites also include any other fringe benefit provided by employer to employee like free meals, gifts exceeding Rs.5000, club and gym facilities etc.

Exempted Perquisites:

Non-taxable fringe benefits include travel allowance, computer or laptop provided by the company for official use, refreshment provided by employer during office hours, provision of medical aid, use of health club, sports club, telephone lines, interest free salary loan provided by employer to employees, contribution to provident fund by employers, free medical and recreational facilities and so on.

Perquisites taxable only by employees: This type of perquisites include car owned by company but sued by employee, education facility for children, service of domestic servant etc. Source: CoolInterview.com

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