Meaning of perquisites, it's valuation, it's types Video Lecture | Income Tax for assessment (Inter Level) - Taxation

Ans. Perquisites, commonly known as perks, are additional benefits or privileges that are provided to employees by their employers, in addition to their regular salary or wages. These perks can include various non-monetary benefits such as company cars, housing allowances, medical insurance, club memberships, and so on.

Ans. The valuation of perquisites is typically based on their fair market value. In other words, the worth of the perk is determined by the price it would fetch in an open market transaction between a willing buyer and a willing seller. Valuation rules may vary between countries and may be subject to specific guidelines provided by tax authorities.

Ans. Perquisites can be categorized into different types based on the nature of the benefit they provide. Some common types include: 1. Car perquisites: Providing company cars or reimbursing vehicle expenses. 2. Housing perquisites: Offering accommodation or reimbursing housing expenses. 3. Medical perquisites: Providing medical insurance or covering medical expenses. 4. Club memberships: Offering memberships to exclusive clubs or gyms. 5. Travel perquisites: Providing travel allowances, tickets, or accommodation for business or personal trips.

Ans. The taxation of perquisites varies depending on the country and its tax laws. In many jurisdictions, perquisites are considered a part of the employee's taxable income and are subject to income tax. Employers may also have obligations to report and withhold taxes on perquisites. It is important for both employers and employees to understand the applicable tax rules and seek professional advice if needed.

Ans. Here are five frequently asked questions related to perquisites: 1. Are perquisites taxable? - Yes, in most cases perquisites are taxable as they are considered part of the employee's income. 2. How do I determine the value of perquisites for tax purposes? - The value of perquisites is typically based on their fair market value, which is determined through specific valuation rules. 3. Are all perquisites taxed the same way? - No, the tax treatment of perquisites may vary depending on the type of perk and the applicable tax laws in your country. 4. Can I claim a tax deduction for perquisites provided by my employer? - Generally, employees cannot claim a tax deduction for the value of perquisites received from their employer. 5. Do I need to report perquisites on my tax return? - Yes, in most cases you are required to report the value of perquisites received on your tax return, as per the tax regulations in your country.