Perquisites are incidental payment, benefit, privilege, or advantage over and above regular income, salary, or wages. Any payment made to an employee by an employer in the form of cash or kind other than basic salary, festival bonus, incentive bonus not exceeding 10% of disclosed profit, arrear or advance salary, leave encashment, overtime and any benefit other than contribution to provident fund, approved pension fund, gratuity fund and superannuation fund. In fact different facilities in can and kind are allowed to employee as perquisites which are also elements of salary. They are discussed below –
House rent allowance: An employee can receive cash rent allowance or free quarter.
Conveyance allowance: An employee may receive cash conveyance allowance or vehicle from his employer.
Entertainment allowance: Amount receives by the employee in full will be added with salary.
Medical allowance: Actual expenditure is exempted. But the actual expense is less than allowance received; the difference will be added with salary.
Interest of R.P.F: Interest exceeding 14.5% rate or 1/3 of basic salary (lower one) is added with salary.
A balance of unrecognized P.F: Amount receives by the employee at the end of service will be added with salary to the extent of employer’s contribution and interest thereof.
