Value of travelling, touring, accommodation and any other expenses paid or reimbursed by the employer for any holiday availed of by the employee under Section 17(2)(viii) & Rule 3(7)(ii)

By | May 23, 2015
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Section 17(2)(viii) & Rule 3(7)(ii):

  1. The value of travelling, touring, stay and any other expenses paid for or borne or reimbursed by the employer for any holiday availed by the employee or any member of his household shall be the sum equal to the amount of the expenditure incurred by the employer on that behalf. This provision applies in respect of trips other than those exempt under section 10(5) read with Rule 2B.
  2.  If the facility is maintained by the employer, and is not available uniformly to all employees, the value of benefit shall be taken to be the value at which such facilities are offered by other agencies to the public.
  3. Where the employee is on official tour and the expenses are incurred in respect of any member of his household accompanying him, the amount of expenditure so incurred shall also be a fringe benefit or amenity.
  4. However, if the official tour is extended as a vacation, the value of such fringe benefit will be limited to the expenses incurred in relation to such extended period of stay or vacation.
  5. The amount so determined as above shall be reduced by the amount, if any, paid by or recovered from the employee for such benefit or amenity.

Reference:

As Per Rule 3(7)(ii) Of the Income Tax Act, 1961-

Rule 3. 

For the purpose of computing the income chargeable under the head “Salaries”, the value of perquisites provided by the employer directly or indirectly to the assessee (hereinafter referred to as employee) or to any member of his household by reason of his employment shall be determined in accordance with the following sub-rules, namely:—

(7) In terms of provisions contained in sub-clause (viii) of clause (2) of section 17, the following other benefits or amenities and value thereof shall be determined in the manner provided hereunder:

(ii)  The value of travelling, touring, accommodation and any other expenses paid for or borne or reimbursed by the employer for any holiday availed of by the employee or any member of his household, other than concession or assistance referred to in rule 2B of these rules, shall be determined as the sum equal to the amount of the expenditure incurred by such employer in that behalf. Where such facility is maintained by the employer, and is not available uniformly to all employees, the value of benefit shall be taken to be the value at which such facilities are offered by other agencies to the public. Where the employee is on official tour and the expenses are incurred in respect of any member of his household accompanying him, the amount of expenditure so incurred shall also be a fringe benefit or amenity:

Provided that where any official tour is extended as a vacation, the value of such fringe benefit shall be limited to the expenses incurred in relation to such extended period of stay or vacation. The amount so determined shall be reduced by the amount, if any, paid or recovered from the employee for such benefit or amenity.

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  2. Value of club membership and expenses incurred in a club: Section 17(2)(viii) & Rule 3(7)(vi)
  3. Value of expenses on credit card u/s 17(2)(viii) & Rule 3(7)(v), of Income Tax Act, 1961
  4. Value of any fringe benefit under Income Tax Act, 1961: Section 17(2)(viii) & Rule 3(7)
  5. Income Tax and Valuation of Rent Free House (Accommodation) provided by employer to employee under Section 17(2)(i) (ii) & Rule 3(1) of Income Tax Act, 1961
  6. Income Tax on Value of Medical Reimbursement, Gift, Vouchers or Token Given to Employee under Income Tax Act 1961: Section 17(2) (viii) & Rule 3(7) (iv)

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