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CBDT may issue new rules on perquisites

Santosh Tiwary

If you have done your tax-planning for the current financial year, be prepared for some changes. The revenue department is expected to come out with the new rules on perquisites by the month-end, specifying the types of perquisites and valuation methods for taxing them.

Along with the rules, the Central Board of Direct Taxes will also issue a separate form for giving details about the perquisites paid to an employee. The form will make it obligatory for the employer to declare the perquisites paid to an employee.

Sources said that only reimbursements for discharge of official duties will be treated as perquisites.

They added that CBDT has studied the salary structure of various companies, both Indian and multinationals, and it is currently finalising the list of expenses to be treated as perquisites.

The perquisite form will have to be submitted by the companies along with Form 16A from the assessment year 2002-03 giving full details of the perquisites paid to the employees.

According to a senior finance ministry official, "perquisite is the expenditure which should have been incurred by the employee but has been incurred by the employer."

The official added that CBDT will ensure that no company hides perquisites under the cover of company expenses. Under the Finance Act 2001, details of perquisites have to be fixed in the manner prescribed in the Income Tax Rules.

The Bill has also made it obligatory for the person responsible for paying income under the head salaries to file details of perquisite and profits in lieu of salary.

A penal provision has been provided under section 272A for failure in complying with this obligation.

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