Perquisites which are received by the employee are to be taxed on the basis of cost to the employer. This means cost incurred by the company to provide such a facility would be taxable value of perquisite in the hands of the employee. Previously the norms for valuing perquisites were different based on particular rate etc., but now the previously followed norms are abolished . This is going to be simple: value of all perks, benefits or amenities on the basis of their cost to the employer. If the Company provides rent-free unfurnished accommodation, an employee will be taxed at 10 per cent of their salary valued at 10 per cent of the basic pay and if furniture is also provided then 10 per cent of the cost of furnishings will be added to the accommodation value. Further if the Company also provides with furnishings like television, air conditioner and refrigerator, an additional amount of 10 per cent of the original cost of the appliances will be added to the accommodation value. This will be taxed every year. If the employer provides hotel accommodation, the employee will be taxed at 2 per cent of the salary per month. Salary for above will include only basic salary. Dearness allowances, entertainment and other tax -free allowances will be excluded. Other benefits or amenities like gas, electricity, water etc. provided will be taxed at cost to the employer. Further if car is provided by the employer,the sum actually spent by the employer for its maintenance will be the value of this perks. The value of the motor car will be taken as Rs.1200 per month for cars which is less than 1.8 litre cc engine and Rs.1600 per month will be for bigger cars. If the car is owned by the Company and maintained by the employer then the value of perquisite will be valued at Rs. 400 for cars which is less than 1.8 litre cc engine and Rs.600 per month will be for bigger cars. If the chauffeur is provided by the Company then the value of perks will be Rs.600 per month . If the car is owned by the employee and the maintenance charges are provided by the Company then the cost incurred by the employer will be considered for tax purpose. All other perks, benefits or amenities will be taxed on the basis of cost to the employer. TOP