Perquisite Valuation :Interest free concessional loan
Rule 3(7)(i): Interest free / concessional 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.
Exceptions
• 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
Please calculate Value of perquisite on interest free Loan from employer
Date of Loan 2nd April 11, Amount of Loan Rs 15000
Date of 2nd loan 5th July 11 Amount of Loan Rs 6000
Please suggest me from which date value of perquisite chargeable to tax
from April-11 or July -11
Sanjay Jaiswal
March 21, 2012 at 1:38 PM