Dr.

RAM MANOHAR LOHIYA NATIONAL LAW

UNIVERSITY, LUCKNOW

ACADEMIC SESSION: 2016– 2017

TAXATION LAW
Synopsis: “Perquisites under the Income Tax Act”

Submitted To

Mr. ANIL SAIN

Assistant Professor

Submitted By

AKANKSHA SINGH

SEMESTER VII (Roll No. 07)

B.A.LLB. (Hons.)
TITLE
Perquisites under the Income Tax Act

INTRODUCTION
The concept of perquisites under the Income Tax Act can be understood as in the case when the
employers may grant allowances or concessions in addition to the salary, which are termed as
perquisites; the subsection gives an inclusive definition of perquisites.1
Oxford dictionary defines perquisite as – ‘any casual emoluments, fee, or profit attached to an
office or position in addition to salary.’ The normal meaning is that there should be a personal
advantage like an office car used by the employee, rent free accommodation or accommodation
at a concession etc. as in contrast with the ‘collective’ enjoyment in case of fringe benefits like
entertainment, hospitality, sales promotion publicity, employee welfare activities etc.

Broadly, “perquisite” is defined in the section 17(2) of the Income-tax Act as including:
1) Value of rent-free or concessional rent accommodation provided by the employer.
2) Value of any benefit/amenity granted free or at concessional rate to specified employees, etc.
3) Any sum paid by employer in respect of an obligation, which was actually payable by assess.
4) Any sum paid by the employer for assurance on life of the employee or to affect a contract for
an annuity.
5) Value of any other fringe benefit as may be prescribed.

OBJECTIVE

1. To understand the scope of section 17(2) of the Income Tax Act, 1962.
2. To understand the meaning of Perquisites under the general meaning and understand the
prescribed law.
3. To analyze the various categories wherein the Act itself provides for perquisites.

1
D.M. Harish, Income Tax Law, Vol. 2, (Bombay: Snow White Publications Pvt. Ltd, 1996), 1811.
SCOPE

The principal purpose in making this project is to explore the scope of Perquisites as per the
Income Tax Act.

In Part I of the project, the researcher will briefly study the concept of perquisites under section
17(2) of income tax act. The different modes of winding up will also be discussed along with as
to who is competent to file petition for winding up in the Court.

Part II will deal with the concept of perquisites taxable in the hands of the employee as a part of
salary income. This would be done with the help of few case laws and the applicable statutory
provisions.

Part III will deal with the concept as to the valuation of perquisites and the idea of perquisites
and allowances exempt from income tax.

Part IV would deal with concept of presumptive tax.

Part V would deal with the question as to what benefits could be attributed to individual
employees but not taxed in hands of employer as it was not his income and this would be
explained in the light of the fringe benefit tax whereby benefits usually enjoyed collectively by
the employees, shall be taxed in the hands of employers excepting transport and canteen services.

BOOKS

1. Dr. Vinod K. Singhania and Dr. Monica Singhania, “Students Guide to Income Tax”,
(40th ed., Taxmann Publication Ltd).
2. Dinesh Vyas, “The Law and Practice of Income Tax”, (9th ed. Lexis
NexisButterworthsWadhwa Nagpur, 2008).

INTERNET

1. www.legalserviceindia.com.
2. www.indlaw.com