Question: Which of the following perquisites are taxable?

Which of the following perquisite is taxable for all employees?

The following perquisites are taxable in the hands of all employees: Rent free accommodation provided by the employer to the employee. Such accommodation may be furnished or unfurnished. Any concession in the matter of rent in respect of the accommodation provided or granted by the employer to the employee.

Which of the following is a taxable income?

Taxable income includes wages, salaries, bonuses, and tips, as well as investment income and various types of unearned income.

On which basis is taxable?

Income as a Tax Base

Let’s take personal or corporate income as an example. In this case, the tax base is the minimum amount of yearly income that can be taxed. This is taxable income. Income tax is assessed on both personal income and the net income generated by businesses.

What is meant by perquisites give 5 examples of tax free perquisites?

As is the case with allowances, the effect of perquisites on salary income largely depends on the type of perquisites that you receive. While there are tax-free perquisites such as rent free accommodation, supply or water or gas, taxable perquisites include education for children, domestic help’s service etc.

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How perquisites are treated for income tax purposes?

The rate at which perquisites are taxed is 30% of the value of fringe benefits. The perquisite tax is paid by the employer who furnishes these fringe benefits to employees. It can be a company, a firm, an association of persons or body of individuals.

What is meaning of direct tax?

A direct tax is a tax that a person or organization pays directly to the entity that imposed it. An individual taxpayer, for example, pays direct taxes to the government for various purposes, including income tax, real property tax, personal property tax, or taxes on assets.

What income is tax free?

Applicable for all individual tax payers:

Rebate of up to Rs 12,500 is available under section 87A under both tax regimes. Thus, no income tax is payable for total taxable income up to Rs 5 lakh in both regimes. Rebate under section 87A is not available for NRIs and Hindu Undivided Families (HUF)

What is the difference between an excise tax and a sales tax?

Sales tax applies to almost anything you purchase while excise tax only applies to specific goods and services. Sales tax is typically applied as a percentage of the sales price while excise tax is usually applied at a per unit rate.

How is tax calculated on salary?

Now, one pays tax on his/her net taxable income.

  1. For the first Rs. 2.5 lakh of your taxable income you pay zero tax.
  2. For the next Rs. 2.5 lakhs you pay 5% i.e. Rs 12,500.
  3. For the next 5 lakhs you pay 20% i.e. Rs 1,00,000.
  4. For your taxable income part which exceeds Rs. 10 lakhs you pay 30% on entire amount.
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What is perquisites and its types?

Perquisite is defined as a privileged gain or profit incidental to regular salary. Perquisites are both taxable and exempt. Perquisites can be simple as company car, fuel reimbursement etc. or may also include interest-free loan, medical facilities, credit cards, accommodation sponsored by the company, etc.

What are perquisites in direct tax?

“Perquisite” may be defined as any casual emolument or benefit attached to an office or position in addition to salary or wages. “Perquisite” is defined in the section 17(2) of the Income tax Act as including: (i) Value of rent-free/accommodation provided by the employer.

What are perquisites in income tax?

A perquisite is a non-cash benefit granted by an employer to the employee. Under the Income Tax Act, a perquisite is defined as a benefit which an employee avails of or is entitled to on account of the employee’s job or position in the enterprise. Obtaining perquisites has important tax consequences for the employee.