Valuation of perquisite in respect of travelling, touring, accommodation – Individual Taxation

Every employee along with normal salary looks for the additional benefits from the employer and this non monetary additional benefit provided by the employer is known as Perquisites (also known as perks).

Perquisite in respect of travelling, touring, accommodation and other expenses paid by employer for any holiday availed by employee (or any member of household) other than leave travel concession is taxable upto certain extent in the hands of the employee.

Actual expenditure incurred by the employer shall be taxable in the hands of the employee i.e.,

Taxable value of the perquisite = Cost to the employer – Amount recovered from the employee.

However, if such facility is not available uniformly to all employees, the value at which such facilities are offered by other agencies to the public shall be taxable.

Where the employee is on official tour and the expenses are incurred in respect of any member of his household accompanying him, the amount of expenditure so incurred shall also be a perquisite or amenity.

Where any official tour is extended as a vacation, the value of such perquisite will be limited to the expenses incurred in relation to such extended period of stay or vacation.

All the above provisions are not applicable to leave travel concession (LTC).

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