Please Help: Valuation of Perquiste
Posted Date : 26-Oct-2011 , 02:46:45 pm | Posted By:
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Interest free loan is xmpt upto Rs 20000 or given for treatement of specified disease.It is allowed if loan was given only for treatement of employee himself..??What is the value of perk if it is given for treatment of Spouse or child..???? |
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Answers:
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 Answer by: Ashish Karundia |
| Dear Friend,
Valuation of perquisite in respect of interest free loan or loan at concessional rate of interest
When a loan is given to employee(or any member of his household) by an employer, it is a perquisite chargeable to tax. It is taxable on the following basis:
Step 1 - Find out the "maximum outstanding monthly balance"(i.e the aggregate outstaning balance for each loan as on the last day of each month).
Step 2 - Find out rate of interest charged by the State Bank of India as on the relevant previous year in respect of loan for the same purpose advanced by it
Step 3 - Calculate interest for each month of the previous year on the outstanding amount mentioned in step 1 at the rate of interest given in step 2.
Step 4 - From the total interest calculated for the entire previous year under step 3, deduct interest actually recovered, if any, from the employee during the previous year.
Step 5 - The balancing amount [ i.e step 3 minus step 4] is taxable value of the perquisite.
Hope the above suffice.
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