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Implication of tax treatment in case of Education exp of Employee borne by employer

27 May 2021

Employee pursuing foreign study cost is Rs.4 Lacs which will be borne by Employers.

What is the tax implication in the case of employee and employer?

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10 Replies

Sundip Dalmia (Consulting and Advisory) (19 Points)
Replied 27 May 2021

This should be added as perquisite to employee salary and TDS on it should be deducted and paid. If employer is bearing the cost of edu, he can pay this and book this as sal exp or employee can be asked to bear this

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CMA Poornima Madhava (CMA) (13112 Points)
Replied 27 May 2021

For the employee, it is a perquisite and for the employer, salary expense.

CA. Sourav Sarkar (Chartered Accountant ) (24588 Points)
Replied 27 May 2021

It is a taxable perquisite of 4 lakhs rupees

veerendar singh (tax consultant) (3306 Points)
Replied 27 May 2021

It is not a perquisite at all.
it will not gross up as salary in the hands of employee

so you may call it exempt in the hands of employee

CA. Sourav Sarkar (Chartered Accountant ) (24588 Points)
Replied 27 May 2021

It is a taxable perquisite

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veerendar singh (tax consultant) (3306 Points)
Replied 27 May 2021

It does not get into the definition of perquisite

CA. Sourav Sarkar (Chartered Accountant ) (24588 Points)
Replied 27 May 2021

If it is so then provide the relevant section with details

veerendar singh (tax consultant) (3306 Points)
Replied 27 May 2021

You may check the act

Sivaramaraju G (Learner) (2398 Points)
Replied 27 May 2021

If employee pursue it will definitely be helpful for employer. hence it will be allowed as deduction for employer as business expense.

in general everyone says it will be perquisite to employee.

whether it will be perquisite or not depends on the employer's benefit.

if the study benefits for employers business alone then it won't be perquisite.

if employee wants to pursue his education to improve his personal degrees and employer helps for that then it will be perquisite to employee.

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