Tax-Free Perquisites (for all employees) for Calculating Salary Income

Salaries, Tax Ready Reckoner

Here’s a detailed breakdown of tax-free perquisites applicable to all employees under the Income Tax Act, 1961 (as of FY 2024-25/AY 2025-26). These benefits are exempt from tax regardless of the employee’s designation or salary level:

Table of Contents

1. Medical Benefits

Employer-run medical facilities: Treatment at hospitals/dispensaries maintained by the employer for employees or their families is fully exempt .
Reimbursements: Up to ₹15,000/yearfor medical expenses (supported by bills) .
Health insurance premiums: Paid by the employer for employees/family under Section 80D.
Critical illness treatment: Costs for ailments like cancer or heart disease at approved hospitals are tax-free .

2. Food and Refreshments

Office meals/snacks: Provided during working hours (up to ₹50/meal) .
Non-transferable meal vouchers: Exempt if used at designated places (e.g., Sodexo) .

3. Telephone and Internet Reimbursements

Official use: Reimbursement for business-related mobile/internet expenses is fully exempt .
Laptops/computers: Provided by the employer for official or personal use .

4. Leave Travel Concession (LTC)

Domestic travel: Exempt twice in a 4-year blockfor employee + family (actual travel cost) .

5. Children’s Education

Scholarships: Provided by the employer are tax-free .
Education allowance: ₹100/month/child(max 2 children) for school education .
Hostel allowance: ₹300/month/child(max 2 children) .

6. Recreational Facilities

Group benefits: Health club, sports, or gym facilities uniformly provided to all employees .

7. Employer Contributions

Provident Fund (PF): Up to 12% of basic salary.
Superannuation fund/NPS: Employer contributions up to ₹7.5 lakh/year.

8. Gifts and Vouchers

Non-cash gifts: Up to ₹5,000/year(e.g., festival vouchers) .

9. Work-Related Travel

Commuting costs: Reimbursement for travel between home and office (e.g., cab fares) is exempt under the new 2025 tax bill.

10. Special Cases

Uniform allowance: For maintenance of official uniforms .
Accommodation in remote areas: For employees at mining/oil sites (≤800 sq. ft. and ≥8 km from city limits).

Key Notes

Documentation: Maintain bills/vouchers for reimbursements (e.g., medical, LTC) .
New Tax Regime: Some exemptions (e.g., medical reimbursements) may not apply if opting for the new regime