Perquisites, commonly known as "perks," refer to benefits or advantages an employee receives from their employer in addition to their regular salary or wages. In the Indian context, these can include various non-cash benefits such as accommodation, company cars, loans at concessional rates, or other facilities provided by the employer. These perks are considered a part of an employee’s income and are subject to income tax under the head "Salaries."
Understanding perquisites is important for small business owners and entrepreneurs as they affect salary structuring and tax compliance. Employers must properly evaluate and disclose the value of these benefits while filing income tax returns to ensure adherence to tax laws. The correct treatment of perquisites can also impact the calculation of taxable income for employees, which in turn influences payroll and accounting processes.
For businesses, managing perquisites carefully helps in maintaining transparent financial records and avoids potential issues with tax authorities during audits or assessments. Detailed guidance on perquisites and their tax implications is available on trusted platforms like FinTax24’s Income Tax Solutions, which can support businesses in navigating compliance smoothly.