TaxFinancial Glossary
Perquisite
Definition
A benefit or privilege provided by an employer in addition to salary, which is taxable as income in the employee's hands. Common perquisites include company-provided car, rent-free accommodation, club memberships, ESOPs (at the time of exercise), and interest-free loans above Rs 20 lakh.
Why It Matters
Perquisites add to your taxable income even though you do not receive them as cash. A rent-free flat provided by your employer is valued at 15% of salary and added to your taxable income. Understanding perquisite taxation prevents surprises when you receive your Form 16 and find a higher tax liability than expected.