Value of benefit resulting from the use of any movable assets owned or hired by the employer shall be considered as perquisite if used by employees for any purpose other than official.
Value of perquisite shall be determined based on the type of assets used by the employee. Value has to be determined as follows:
- For use of laptops and computers – Nil
- For assets other than laptops and computers, 10% per annum of the actual cost of such asset is considered as the value of perquisite. If the assets are hired by the employer, then the actual amount of rent or charge paid or payable by the employer for hiring such assets is considered as the value of perquisite.
In case any amount is recovered by the employer from an employee for use of these assets, then such amount has to be recovered from the above value calculated.
Value of perquisite in case of transfer of movable assets
If the movable asset is transferred to the employee by the employer, then the value as determined will be considered as perquisite in the hands of employee. Determination of such value depends on the type of asset transferred.
In case of computers and electronics items, you need to deduct depreciation at the rate of 50% on the cost of employer for each completed year of use on the basis of reducing balance method out of the actual cost price to the employer.
Rate of depreciation for a motor car is 20% and for all other assets its 10%. In cases of assets other than motor cars, computers and electronics items, you need to calculate depreciation as per straight line method.
Whatever value you have calculated on the basis of our above discussion has to be reduced by the amount that is recovered from an employee by the employer. The final amount after such deduction will be considered as the value of perquisite to be added to gross salary taxable under the head income from salaries.
