What do we Mean by Perquisite for Income Tax Purpose

Generally perquisites can be defined as benefits in addition to normal salary to which the employee has a right by virtue of his employment terms i.e. given by the employer to the employee for his/her services. It can be in the in the form of cash (no fixed amt.)or in kind e.g. rent free accommodation or any other benefit /service given or provided at concessional or free of cost to given set of employees.

Meaning of perquisite: sec 17(2)

  1. RFA (furnished or unfurnished )
  2. Concession in rent for accommodation provided by employer
  3. Value of any benefit or amenity granted or provided free of cost or at concessional rate to specified employee
  4. Employee obligation paid by employer
  5. Value of any other fringe benefit or amenity(excluding FBT)
  6. Value of any specified security or scheme
  7. Sum payable by employer to an approved super Annuation Fund in respect of assessee to the extent of 100000/- p.a.


  • Specified employee means:
  • Director employee
  • Employee having substantial interest i.e.20% voting power in company
  • Employee whose income from salary exceeds Rs. 50000 in any enterprise
  • Salary means: Basic salary + Bonus + fee commission + perquisite cover under clause (iv)

Allotment of shares, debentures or warranty directly or indirectly under any ESOP or scheme of company offered to employees in accordance with central government guidelines is not treated as perquisite

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