Perquisites

Perquisites sit at old Section 17(2), new Sections 15–19, valued under Rule 15 of the Income-tax Rules, 2026. Valuation figures below apply from Tax Year 2026-27 unless stated otherwise; confirm current figures before relying on them for an earlier year. This article is for general information and does not constitute tax advice.

What a perquisite is

A perquisite is a non-cash benefit the employer provides: rent-free accommodation, a company car, a concessional loan, subsidised meals, a club membership, and similar. Unlike an allowance, which is a fixed cash amount, a perquisite is taxed on a valuation the Rules set out, and that valuation is largely the same regardless of which tax regime you file under; it’s the exemptions attached to allowances, not perquisite valuation itself, that differ between regimes, as covered in Allowances.

Rent-free accommodation

This valuation hasn’t changed: for non-government employees, it’s the actual rent paid by the employer, or a percentage of salary based on city population — 15% in a city above 25 lakh population, 10% between 10–25 lakh, 7.5% elsewhere — whichever figure is lower.

What changed in valuation from Tax Year 2026-27

Three values increased meaningfully for Tax Year 2026-27 onward, not the return currently being filed for FY 2025-26:

Perquisite	FY 2025-26 (current filing)	From Tax Year 2026-27
Company car, engine up to 1.6L	₹1,800/month	₹5,000/month
Company car, larger engine	₹2,400/month	₹7,200/month
Free/subsidised meal exemption	₹50 per meal	₹200 per meal
Employer-funded overseas medical treatment	Partly exempt, subject to RBI-approved limits	Fully exempt, removed from the perquisite definition entirely

For a higher-value company car, the increased valuation raises the taxable perquisite even though the underlying rule (a flat monthly figure regardless of the car’s actual running cost) is unchanged. It’s worth recalculating a car-versus-cash comparison on the new figures rather than assuming an older calculation still holds.

Concessional and interest-free loans

Where an employer gives an employee a loan at no interest or below-market interest, the difference between the employer’s rate and the SBI benchmark rate for a comparable loan is a taxable perquisite, computed on the outstanding balance. Two situations sit outside this entirely: loans whose aggregate outstanding amount stays below a small threshold (commonly cited at ₹20,000), and loans taken for the treatment of specified medical conditions, both of which are exempt from the perquisite charge regardless of the interest rate actually charged.

What stays tax-free regardless of value

• Medical treatment at the employer’s own hospital, or a hospital notified for the purpose
• Employer-funded refresher training
• An official-use telephone or mobile connection
• Recreational facilities made available to employees generally, rather than to specific individuals

Two perquisites covered on their own pages

Two perquisite categories are substantial enough, and specific enough, to have their own dedicated treatment rather than being summarised here. ESOP and RSU allotments are a perquisite taxed on fair market value at exercise or vesting, covered in full, including the cost-basis and startup-deferral mechanics, in ESOP and RSU Taxation. And employer contributions to PF, NPS, or superannuation funds exceeding ₹7.5 lakh in a year, whether from one employer or combined across two concurrent jobs, are taxed as a perquisite on the excess, along with any interest or accretion on it; the combined-employer angle is covered in Moonlighting and Multiple Form 16.

Gifts, and the “specified employee” distinction

Gifts in kind from an employer are exempt in aggregate up to a small annual threshold, commonly cited around ₹5,000; value beyond that becomes a taxable perquisite. Separately, certain perquisite categories are taxable only for a “specified employee”, broadly a director, someone with a substantial interest in the company, or an employee above a defined salary level. That distinction continues under the new Act, with the precise salary threshold sitting in the Rules rather than the Act itself, and it is worth checking against your own facts before assuming a benefit falls outside the specified-employee category.