Interest free or concessional loans [Rule 3(7)(i)]: It is common practice, particularly in financial institutions, to provide interest free or concessional loans to employees or any member of his household. The value of perquisite arising from such loans would be the excess of interest payable at prescribed interest rate over interest, if any, actually paid by the employee or any member of his household.
The prescribed interest rate would now be the rate charged per annum by the State Bank of India as on the 1st day of the relevant financial year in respect of loans of same type and for the same purpose advanced by it to the general public.
Perquisite value would be calculated on the basis of the maximum outstanding monthly balance method. For valuing perquisites under this rule, any other method of calculation and adjustment otherwise adopted by the employer shall not be relevant. However, small loans up to Rs. 20,000/- in the aggregate are exempt.
Loans for medical treatment of diseases specified in Rule 3A are also exempt, provided the amount of loan for medical reimbursement is not reimbursed under any medical insurance scheme. Where any medical insurance reimbursement is received, the perquisite value at the prescribed rate shall be charged from the date of reimbursement on the amount reimbursed, but not repaid against the outstanding loan taken specifically for this purpose.
Calculation of Value of Interest Free Loan
Any loan given free of interest or concessional interest shall be a taxable perquisite and calculated as follows:
• Interest calculated at the rate charged by State Bank of India as on 1st day of previous year on loan for the same purpose. This is to be calculated on maximum outstanding monthly balance.
• Less actual interest paid by employee.
• Loan upto Rs. 20,000.
• Loan for medical purposes for prescribed diseases
Steps to calculate value of Perquisite
Step 1 : Calculate maximum outstanding monthly balance at the end of every month
Step 2 : Find out rate of interest charged by SBI as on 1st April of previous year in case of similar loan
Step 3 : Calculate interest on amount as per Step 1 @ Rate as per Step 2 for each month
Step 4 : Total of interest for the year as per Step 3
Step 5 : Less : Interest charged from employee
Step 6 : Balance amount is the value of perquisite in respect of interest free / concessional loan
Interest rates as on 1st APRIL, 2016 on various loans in Personal Segment advances are as under
1 year MCLR RATE: 9.20 %
2 year MCLR RATE: 9.30%
|MCLR RATE : 09.20 %|
|Borrowers’ category||Home Loan interest rate, irrespective of loan limit|
|Women||20 bps above the one year MCLR of 9.20 % i.e 9.40% p.a.|
|Others||25 bps above the one year MCLR of 9.20% i.e.9.45% p.a.|
|SBI Student Loan Scheme|
|SBI Student Loan* (Floating Interest Rate linked to 1 year MCLR with 1 year reset)|
|For loans uptoRs 4 lac||2%above 1 year MCLR i.e., 11.20%|
|Above Rs 4 lac and uptoRs 7.50 lac||2% above 1 year MCLR i.e., 11.20%|
|Above Rs 7.50 lac||1.75% % above 1 year MCLRi.e.,10.90%|
|* for Girl Student 0.50% concession in interest rate|
|Loan against pledge of Gold Ornaments|
|2%above 1 year MCLR with 1 year reset, currently11.20% p.a. (floating)|
|Loan against NSCs/ KVPs/ RBI Relief Bonds/ Surrender value of SBI Life/ LIC/ SBI Magnum etc.|
|4.50%above 1 year MCLR with 1 year reset i.e., 13.70%(floating)|
|Scheme Name||Tenure||Interest rate|
|For Men||For Women|
|SBI Car Loan Scheme||For All Tenure||0.60% above 1 year MCLR i.e. 9.80% p.a.||0.55% above 1 year MCLR i.e. 9.75% p.a.|
|SBI Combo Loan Scheme||For All Tenure||0.60% above 1 year MCLR i.e. 9.80% p.a.||0.55% above 1 year MCLR i.e. 9.75% p.a.|
|NRI Car Loan||For All Tenure||0.60% above 1 year MCLR i.e. 9.80% p.a.||0.55% above 1 year MCLR i.e. 9.75% p.a.|
|Certified Pre-owned car loan||For All Tenure||4.00% above 1 year MCLR i.e. 13.20% p.a.|
|SBI Loyalty Car Loan Scheme||Car Loan, Combo Loan, NRI Car Loan||0.50% above 1 year MCLR i.e. 9.70% p.a.||0.45% above 1 year MCLR i.e. 9.65% p.a.|
|Certified Pre-owned Car Loan Scheme , Used Car Loan Scheme||1.80% above 1 year MCLR i.e. 11.00% p.a.||1.75% above 1 year MCLR i.e. 10.95% p.a.|
|Super Bike Loan Scheme||For All Tenure||3.00% above 1 year MCLR i.e. 12.20% p.a.|
|Scheme Name||Check Off||Rate of Interest*|
|Xpress Credit||Full Check-off
|3.30% – 3.80% above 2 year MCLR i.e., 12.60% – 13.10% p.a. currently|
|4.30% – 4.80% above 2 year MCLR i.e., 13.60% – 14.10% p.a. currently|
|5.30% – 5.80% above 2 year MCLR i.e., 14.60% – 15.10% p.a. currently|