Perqusite rates for Staff advance FY 2020-2021

What is the perqusite rates for Staff advance FY 2020-2021?

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Hi @Soma

Payroll managers will do well to make note of the following:

  1. If any payment made to an employee is in the nature of loan, Rule 3(7)(i) will govern the taxability of the same. Just because the loan is called by some other name by the company, it cannot be left out from the ambit of taxation. After all, rose, called by any other name, would still smell the same.
  2. Salary advance and loan are two different things. A salary advance is compensation paid to an employee ahead whenever it falls due – for example, salary for May 13 which is typically paid on 31-May is paid on, say, 15-May. Salary advance is taxable as per the Section 17 of the Income Tax Act. However, loan taxability is governed by Rule 3(7)(i).

Let us take a look at Rule 3(7)(i) in detail and examine the conditions which govern perquisite calculation on loan provided to employees. The text of Rule 3(7)(i) is as follows.

To know more: https://www.hinote.in/loan-to-employees-perquisite-calculation

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SBI has published the rate of interest for perquisite valuation for FY 2020-21. Please find below link for your ready reference. Also attached in PDF file for your record.

https://www.sbi.co.in/web/business/information/interest-rates-perquisite-calculation

Thanks & Regards,

Hemant Karmalkar

SBI lending rate for perquisite valauation-FY 2021.pdf (2.43 MB)

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Perquisite will be the differences between cost of such loan/facilities provided by the employer to the employee Vs rate at which such facilites are available in the market.

Thanks

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