Difference between perqusities and allowance
This query is : Resolved
08 December 2009
What is the difference between perqusities and allowance
08 December 2009
the main difference between the allowances and preks is that the allowances are received by employees in hands and they are spent, whereas in the perks money is not received, it is only advantage which is received
08 December 2009
what is the differece between perqusities and allowance?
09 December 2009
Perks are special benefits that are provided to staff who perform a particular job or belongs to a particular group. For example Company Car, Residential Quarter, Private medical Insurance etc. The perks are not form the part of Salary slip/muster roll record.
An allowance is monetary consideration given to someone, usually on regular basis in order to help them to meet out their personal expenses. It is assumed that a particular employee incures his substaintial fund and an assistance will provide a cushion. Examples are Child education allowance, City compensatory allowance, House Rent Allowance, Transport Allowance, Special Allowance etc.
Hope, I would be able to solve your query. Please confirm.
Regards
An allowance is monetary consideration given to someone, usually on regular basis in order to help them to meet out their personal expenses. It is assumed that a particular employee incures his substaintial fund and an assistance will provide a cushion. Examples are Child education allowance, City compensatory allowance, House Rent Allowance, Transport Allowance, Special Allowance etc.
Hope, I would be able to solve your query. Please confirm.
Regards
09 December 2009
whats the difference between perqusities and allowance
21 July 2024
The terms "perquisites" and "allowance" refer to different types of benefits or compensation provided to employees, each with distinct characteristics:
### Perquisites (Perks):
- **Definition:** Perquisites, often referred to as "perks," are non-monetary benefits or facilities provided by an employer to employees in addition to their regular salary or wages. These are typically provided for the personal use or benefit of the employee.
- **Examples:** Perquisites can include company cars, housing or accommodation provided by the employer, medical reimbursements, club memberships, interest-free loans, stock options, free or subsidized meals, etc.
- **Tax Treatment:** In many countries, including India, perquisites are taxable under the head of "Income from Salaries." The value of perquisites provided to employees is added to their salary and taxed accordingly.
### Allowance:
- **Definition:** An allowance is a specific amount of money paid to employees by their employers to meet certain expenses or costs incurred during the course of employment. Allowances are generally provided to employees to cover specific expenses related to their job or to compensate for certain conditions of employment.
- **Types:** There are various types of allowances, such as house rent allowance (HRA), conveyance allowance, medical allowance, special allowance, travel allowance (TA), dearness allowance (DA), etc.
- **Tax Treatment:** The tax treatment of allowances can vary based on the nature of the allowance and the applicable tax laws in the country. Some allowances may be fully taxable, partially taxable, or tax-free depending on specific conditions and exemptions provided by tax authorities.
### Key Differences:
1. **Nature:** Perquisites are non-monetary benefits or facilities provided by the employer, while allowances are specific amounts of money provided to employees to cover certain expenses.
2. **Taxation:** Perquisites are generally taxable as part of the employee's salary income, whereas allowances may be taxable or tax-free based on the nature of the allowance and applicable tax regulations.
3. **Purpose:** Perquisites are typically provided to enhance the employee's standard of living or work convenience, whereas allowances are intended to reimburse specific expenses or provide compensation for particular conditions of employment.
In summary, perquisites and allowances represent different forms of compensation provided by employers to employees, each serving distinct purposes and subject to specific tax treatments under applicable laws. Understanding these differences helps both employers and employees manage their tax liabilities and benefits effectively.
### Perquisites (Perks):
- **Definition:** Perquisites, often referred to as "perks," are non-monetary benefits or facilities provided by an employer to employees in addition to their regular salary or wages. These are typically provided for the personal use or benefit of the employee.
- **Examples:** Perquisites can include company cars, housing or accommodation provided by the employer, medical reimbursements, club memberships, interest-free loans, stock options, free or subsidized meals, etc.
- **Tax Treatment:** In many countries, including India, perquisites are taxable under the head of "Income from Salaries." The value of perquisites provided to employees is added to their salary and taxed accordingly.
### Allowance:
- **Definition:** An allowance is a specific amount of money paid to employees by their employers to meet certain expenses or costs incurred during the course of employment. Allowances are generally provided to employees to cover specific expenses related to their job or to compensate for certain conditions of employment.
- **Types:** There are various types of allowances, such as house rent allowance (HRA), conveyance allowance, medical allowance, special allowance, travel allowance (TA), dearness allowance (DA), etc.
- **Tax Treatment:** The tax treatment of allowances can vary based on the nature of the allowance and the applicable tax laws in the country. Some allowances may be fully taxable, partially taxable, or tax-free depending on specific conditions and exemptions provided by tax authorities.
### Key Differences:
1. **Nature:** Perquisites are non-monetary benefits or facilities provided by the employer, while allowances are specific amounts of money provided to employees to cover certain expenses.
2. **Taxation:** Perquisites are generally taxable as part of the employee's salary income, whereas allowances may be taxable or tax-free based on the nature of the allowance and applicable tax regulations.
3. **Purpose:** Perquisites are typically provided to enhance the employee's standard of living or work convenience, whereas allowances are intended to reimburse specific expenses or provide compensation for particular conditions of employment.
In summary, perquisites and allowances represent different forms of compensation provided by employers to employees, each serving distinct purposes and subject to specific tax treatments under applicable laws. Understanding these differences helps both employers and employees manage their tax liabilities and benefits effectively.
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