Rules of Perquisite
Perquisite is a casual emolument or benefit attached to an office or position in addition to salary or wages which is availed by an employee. “Perquisite” may be defined as any casual emolument or benefit attached to an office or position in addition to salary or wages.
There are several rules regarding rules perquisites, some are slimed below –
(a) Dearness Allowance: Dearness allowance is the most popular allowance being given to employees these days. It means the payment made by the employer to the employee to cope with the higher cost of living, which is general is certain percentage of the basic salary.
(b) Bonus: It means the payment of extra salary based on the basis salary or otherwise for festivals like Eid, Christmas etc. or rewards for good performance. The total amount of bonus is taxable the therefore included under income from salary.
(c) Special Allowance: Any special allowance, benefits or perquisites specially granted to meet expenses wholly and necessarily incurred in the performance of the duties of an office or employment of profit are totally exempted from tax.
(d) House rent Allowance: This sort of relief is granted by the employer to the employee in order to compensate him in the matter of higher rent prevailing to the employee in order to compensate him in the matter of higher rent prevailing in big cities.
(e) Entertainment Allowance: This is an allowance given to the employee for entertaining customers or clientele of the employer. The whole amount of entertain allowance will be included under the head salary income and there will be no exception. But nothing will be added for free tea, coffee, beverages or the like thereof that are provided at the office premises during the course of work.