Perquisite Value Calculator (Rule 3 of the Income-tax Rules)
Benefits an employer provides in kind — a car, a house, a cheap loan, gift vouchers — are "perquisites" taxable as salary under section 17(2). Their value is not what the employer spends but what Rule 3 prescribes. This calculator values the four most common perquisites so payroll teams can report them correctly in Form 12BA and employees can check their Form 16.
Motor car (Rule 3(2))
- Employer-owned car, used partly for office, running cost borne by employer: ₹1,800 per month (engine up to 1,600 cc) or ₹2,400 per month (above 1,600 cc), plus ₹900 per month if a driver is provided.
- If the employee bears running cost: ₹600 / ₹900 per month plus ₹900 for driver.
- Wholly personal use: actual running cost + 10% per annum of the car's cost (or hire charges) + driver salary, less any amount recovered.
- Employee-owned car with employer reimbursing expenses: actual reimbursement less ₹1,800/₹2,400 (and ₹900 for driver) per month, unless log books prove higher official use.
Rent-free accommodation (Rule 3(1), amended 1 September 2023)
- Owned by employer: 10% of salary in cities with population above 40 lakh, 7.5% between 15 and 40 lakh, 5% elsewhere (2011 census).
- Leased by employer: actual rent or 10% of salary, whichever is lower.
- Add 10% per annum of the cost of employer-owned furniture or actual hire charges; deduct rent recovered.
Interest-free or concessional loan (Rule 3(7)(i))
Value = interest at the SBI rate (as on 1 April of the year, for that loan category) on the maximum outstanding monthly balance, less interest actually charged. Loans up to ₹20,000 in aggregate and loans for treatment of specified diseases are exempt.
Gifts and vouchers (Rule 3(7)(iv))
Gifts in kind up to ₹5,000 per year are exempt; if the aggregate exceeds ₹5,000 the whole value is taxable. Cash gifts are always taxable.
Worked example
A 2,000 cc company car with driver, used for office and personal purposes for 12 months, expenses paid by the employer: perquisite = (2,400 + 900) × 12 = ₹39,600 per year — regardless of the car's price or the actual fuel bill. At the 30% slab this adds about ₹12,355 to the employee's tax.
Frequently Asked Questions
How is a company car taxed if used for both office and personal travel?
A fixed value applies: ₹1,800 per month for cars up to 1,600 cc or ₹2,400 per month above that, plus ₹900 per month for a driver, when the employer bears running expenses. Actual expenses are irrelevant.
What are the new rent-free accommodation rates?
From 1 September 2023, for employer-owned accommodation the value is 10%, 7.5% or 5% of salary for cities with population above 40 lakh, 15 to 40 lakh and below 15 lakh respectively (2011 census). For leased accommodation it is the lower of actual rent and 10% of salary.
Is an interest-free loan from my employer taxable?
Yes, the notional interest at SBI's rate for a similar loan as on 1 April, less any interest you pay, is a taxable perquisite — unless total loans are ₹20,000 or less or the loan is for specified medical treatment.
Are Diwali gift vouchers taxable?
Gifts or vouchers in kind up to ₹5,000 per year in aggregate are exempt. If the total exceeds ₹5,000 the entire amount becomes taxable, and gifts in cash are taxable from the first rupee.
Disclaimer: This tool is for general information and estimation only. Tax rates and rules change — verify with official sources or a professional before acting. Read full disclaimer.