What is Perquisites explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Perquisites is a term you will often come across in Direct Tax. This guide explains what Perquisites means, gives a simple example, and shows why it matters for taxpayers and businesses — in plain English.
What is Perquisites?
Perquisites is non-cash benefits or amenities provided by an employer to an employee — such as a company car, rent-free accommodation or club membership — taxed as salary.
In practical terms, Perquisites is a direct-tax concept — it plays a role in how income tax is computed, deducted or paid by individuals and businesses. Understanding it helps you read financial documents, stay compliant and make better decisions.
Perquisites explained with an example
A rent-free flat provided by the employer is a perquisite added to the employee's taxable salary. Examples like this make it easier to see how Perquisites works in real situations.
Why Perquisites matters
Perquisites are valued per prescribed rules and taxed in the hands of the employee.
Perquisites at a glance
| Category | Direct Tax |
| Meaning | Non-cash benefits or amenities provided by an employer to an employee — such as a company car, rent-free accommodation or club membership — taxed as salary. |
| Example | A rent-free flat provided by the employer is a perquisite added to the employee's taxable salary. |
Key points to remember
- Where it applies: Direct Tax
- In short: Non-cash benefits or amenities provided by an employer to an employee — such as a company car, rent-free accommodation or club membership — taxed as salary.
- Why it matters: Perquisites are valued per prescribed rules and taxed in the hands of the employee.
Related terms
If you are learning about Perquisites, these related terms are worth knowing too:
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