Section 17 — Perquisite

(1) For the purposes of this Part, “perquisite” includes—
( a) the value of rent-free accommodation provided to the assessee by his
employer computed in such manner as may be prescribed;
( b) the value of any accommodation, computed in such manner as may be
prescribed, provided to the assessee by his employer at a concessional
rate which is in excess of rent recoverable from or payable by the
assessee;
( c) the value of any benefit or amenity granted or provided free of cost or
at concessional rate in the following cases:—
( i) by a company to an employee, who is a director thereof or who has
a substantial interest in the company;
( ii) by any employer (including a company) to an employee [other
than employee referred in sub-clause (i)] whose income under the
head “Salaries” by way of monetary payment (from one or more
employers) exceeds such amount as may be prescribed;
( d) the value of any specified security or sweat equity shares allotted or
transferred, directly or indirectly, by the current employer, or former
employer, free of cost or at concessional rate to the assessee;
( e) the value of any other benefit or amenity, as may be prescribed;
( f) any sum paid by the employer in respect of any obligation which, but
for such payment, would have been payable by the assessee;
( g) any sum payable by the employer to effect an assurance on the life of
the assessee or to effect a contract for an annuity, whether directly or
through a fund, other than—
( i) a recognised provident fund; or
( ii) an approved superannuation fund; or
( iii) a Deposit-linked Insurance Fund established under—
( A) section 3G of the Coal Mines Provident Fund and Miscella -
neous Provisions Act, 1948 (46 of 1948); or
( B) section 6C of the Employees’ Provident Funds and Miscella-
neous Provisions Act, 1952 (19 of 1952);
( h) aggregate amount of any contribution, in excess of ` 750000 in a tax
year, made to the account of the assessee by the employer—
( i) in a recognised provident fund;
( ii) in the scheme referred to in section 124(1); and
( iii) in an approved superannuation fund;
( i) the annual accretion by way of interest, dividend or any other amount
of similar nature during the tax year to the balance at the credit of the
fund or scheme referred to in clause ( h), computed in such manner, as
may be prescribed (to the extent it relates to the contribution referred
to in the said clause in any tax year).
(2) Nothing in sub-section (1) shall apply to—
( a) the value of any medical treatment provided to an employee or any
member of his family in any hospital maintained by the employer;
( b) any sum paid by the employer in respect of any expenditure actually
incurred by the employee on his medical treatment or treatment of any
member of his family—
( i) in any hospital maintained by the Government, or any local
authority, or any other hospital approved by the Government for
the purposes of medical treatment of its employees;
( ii) in respect of the prescribed diseases or ailments, in any hospital
approved by the Principal Chief Commissioner or Chief Commis-
sioner having regard to such guidelines as may be issued in this
behalf;
( c) any portion of the premium paid by an employer in relation to an
employee, to effect or to keep in force an insurance on the health of
such employee under any scheme approved, for the purposes of section
30(c), by the—
( i) Central Government; or
( ii) Insurance Regulatory and Development Authority established
under section 3(1) of the Insurance Regulatory and Development
Authority Act, 1999 (41 of 1999);
( d) any sum paid by the employer in respect of any premium paid by the
employee to effect or to keep in force an insurance on his health or the
health of any member of his family under any scheme, approved for the
purposes of section 126, by the—
( i) Central Government; or
( ii) Insurance Regulatory and Development Authority established
under section 3(1) of the Insurance Regulatory and Development
Authority Act, 1999 (41 of 1999);
( e) any expenditure incurred by the employer for the use of any vehicle for
journey by the assessee from his residence to his office or other place of
work, or from such office or place to his residence;
( f) any expenditure incurred by the employer, or any sum paid by the
employer in respect of any expenditure actually incurred by the employee,
on—
( i) medical treatment of the employee or any family member of such
employee outside India;
( ii) travel and stay abroad for the employee or any member of the family
of such employee for medical treatment;
( iii) travel and stay abroad of one attendant who accompanies the
patient in connection with such treatment.
(3) For the purposes of sub-section (2)(f),—
( a) the expenditure on medical treatment and stay abroad shall be excluded
from the perquisite only to the extent permitted by the Reserve Bank of
India; and
( b) the expenditure on travel shall be excluded from perquisite only in
the case of an employee whose gross total income, as computed before
including therein the said expenditure, does not exceed such amount as
may be prescribed.
(4) For the purposes of this section,—
( a) “fair market value” means the value determined in accordance with the
method, as may be prescribed;
( b) “family”, in relation to an individual, shall have the meaning assigned
to it in Schedule III (Note 2);
( c) “gross total income” shall have the meaning assigned to it in section
122(10);
( d) “hospital” includes a dispensary or a clinic or a nursing home;
( e) “option” means a right but not an obligation, granted to an employee to
apply for the specified security or sweat equity shares at a predetermined
price;
( f) “specified security” means the securities as defined in section 2( h) of
the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and, where
employees’ stock option has been granted under any plan or scheme
therefor, includes the securities offered under such plan or scheme;
( g) “sweat equity shares” means equity shares issued by a company to its
employees or directors at a discount or for consideration other than
cash for providing know-how or making available rights in the nature of
intellectual property rights or value additions, by whatever name called;
( h) the value of any specified security or sweat equity shares shall be the
fair market value of the specified security or sweat equity shares, on the
date on which the option is exercised by the assessee, as reduced by the
amount actually paid by, or recovered from, the assessee in respect of
such security or shares.