THE much-awaited perquisite valuation rules have finally been notified by the CBDT. The Board has amended Rule 3 to give effect to the abolition of FBT, announced in the Budget 2009. Vide Income Tax (13th) Amendment Rules, the Board has notified the new valuation guidelines w.e.f April 1, 2009 for the AY 2010-11. Although the rules are largely the same old wine in a new bottle but it is strange that the TPL has taken unduly long time to finalise and notify it.
Anyway, the focus this time seems to be to capture the realistic expenses reimbursed by the employer to an employee in various manners. For instance, providing car is a common practice. Most senior functionaries in a big corporate tend to get official car for private use or partly private and private official, the CBDT has added the salary of the driver along with the actual cost of maintenance ect to the income of the individual taxpayer for paying tax. Employees getting official cars will now have to pay tax on a monthly valuation of Rs 1,800 for the vehicle and Rs 500 for chauffeur if the car capacity is less than 1.6 litre. For cars above that category, valuation will be Rs 2,400 for car and Rs 900 for chauffeur. Before the introduction of FBT, the valuation for car was Rs 1,200 a month.
Other areas where the Board has focussed are accommodation provided by employer, staff like sweeper, gardener, watchman and personal staff provided to an employee, supply of gas, electric energy and water, fee or concessional education facilities to the employee or any member of the household; carriage of household goods; interest-free or concessional loans provided for any purpose except medical treatment expenses reimbursed under any insurance scheme; value of travelling, touring, accommodation and any other expenses paid or reimbursed by the employer; value of free food and non-alcoholic beverages; value of any gift or voucher or token above Rs 5000/-; sum paid towards add-on credit card-care; sum paid towards club membership and subscription of periodicals etc; expenses towards movable assets like laptops and computers and also any other expenses incurred by the employer for the employees.
For taxing ESOP, the Board has focussed on Fair Market Value (FMV) which will be the average of the opening price and closing price of the shares on the date of excercise on the recognised stock exchange which records the highest volume of trading in shares. This will be in the case of listed companies. For unlisted ones, the FMV will be the value determined by a merchant banker.