Question

What is meant by perquisites what are tax free perquisites?

Answer 1

Answer:

Perquisites under Income Tax Act. Perquisites is defined as a benefit which one enjoys or is entitled to on account of one's job or position in the dictionary. ... Under section 17(2) of the Income Tax Act, perquisites include: Value of rent free accommodation provided to the assessee by his employer.

Tax Free Perquisites. Perquisites provided by an employer to an employee are taxable under the head of Salaries. However, some types of perquisites are tax free in the hands of the employee. For effective tax planning and reduction of tax liability, the employer and employee must be aware of such tax free perquisites.