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Free perquisite

Venkateswar Reddy (Audit Assistant) (195 Points)

21 March 2014

Hai friends,

My employee has attented a certificate program(course fee Rs.10,000 )that improves his abilities to do work more efficiently towards organisation. That amount has been reimbersed by Organisation. Is this treated as free perquisite or liability pay tax under 17(2)?

Please reply with IT ACT suppotives & case studies

Thanks in advance

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1 Replies

Supreeth Sharma (CA Final) (113 Points)
Replied 21 March 2014

Unlike other perquisite, which will not improve the skills of the employee (but only keeps him happier), it is not a perquisite because the certified program is enhancing the skills of employee, and is similar to training (though not an actual training), because of which it is benefiting the company by better performance of the employee.

Also, in other perks, just by keeping the employee happy, he might perform efficiently and with more efforts, but doent really mean his skills will improve out of nowhere. No doubt he could be working harder. :)