1. The salary (basic + DA) should be low. The rest should come by way of such allowances on which the employer pays FBT and you don't pay any tax thereon.
2. Interest paid on housing loan is deductible u/s 24 up to Rs 1.5 lakh (Rs 150,000) on self-occupied property and without any limit on a commercial or rented house.
3. The repayment of housing loan from specified sources is also deductible irrespective of whether the house is self-occupied or given on rent within the overall ceiling of Rs 1 lakh of Sec. 80C.
4. Where the accommodation provided to the employee is taken on lease by the employer, the perk value is the actual amount of lease rental or 20 per cent of the salary, whichever is lower. Understandably, if the house belongs to a family member who is at a low or nil tax zone the family benefits. Yes, the maximum benefit accrues when the rent is over 20 per cent of the salary.
5. A chauffeur driven motor car provided by the employer has no perk value. True, the company would pay FBT. It is @30 per cent on 20 per cent of the value thereby bringing down the effective rate to 6 per cent. Better still, the employee owns the car and the employer pays the cost of petrol and maintenance.
6. Contributions up to Rs 1 lakh (Rs 100,000) per annum to Superannuation Fund of the employee is not taxed either as fringe benefit in the hands of the employer or as perk in the hands of the employee.
[Excerpt from Taxpayer to Taxsaver by A. N. Shanbhag and Sandeep Shanbhag, published by Vision Books.] (C) All rights reserved.
Image: A new apartment block in Mumbai. | File photograph.
Also read: India's top 10 pharmaceutical companies
Advertisement
