Chapter: Income from Salaries

#CAPassion #DTCL #M17-010

CIT v. Shankar Krishnan (2012 – Bom. HC)

Issue: Can notional interest on security deposit is given to landlord in respect of residential premises taken on rent by the employer and provided to the employee, be included in the perquisite value of rent-free accommodation given to the employee?

Facts: The assessee employee getting RFA, monthly rent paid 10000, also paid interest-free refundable security of rupees 30 Lacs, computed perquisite value on basis of monthly rent of 10000 only
AO contended that 30 lacs were required to be considered for valuation of RFA perquisite.

Comm.(A) upheld AO contention

Decision: AO is not right in adding the notional interest on the security deposit given by the employer for valuation of perquisite.

#CAPassion #DTCL #M17-011

CIT v. Director, Delhi Public School (2011 – Pun. & Har. HC)

Issue: Can limit of Rs. 1000 per month per child be allowed as standard deduction while computing the perquisite value of free or concessional education facility provided to the employee by the employer?

Decision: Held that on a reading of rule 3(5), it flows that, in case value of perquisite for free/concessional education facility arising to an employee exceeds Rs. 1000 per month per child, the whole perquisite shall be taxable in hands of employee and no standard deduction can be provided. It is only in case perquisite is less than 1000 per month per child, perquisite value shall be Nil. Therefor, 1000 per month per child is not a standard deduction.

Gourav Kapoor
CA Passion


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