Perquisites are the fringe benefits or amenities that an employer provides to their employees over and above their regular salary. Perquisites can be in the form of cash or non-cash benefits and can include accommodation, company or self-owned vehicles, stock options, club memberships, medical reimbursements, subscriptions to periodicals, etc. . Perquisites are part of an employers Cost to Company (CTC) package, which is the total cost that an employer incurs in hiring an employee and includes not only the employees salary but also various other costs, including perquisites.

Perquisites can be classified into two types: taxable and non-taxable perquisites. Non-taxable perquisites are exempted from tax, while tax is levied on taxable perquisites. Tax-free perquisites include:

• Free food and non-alcoholic beverages provided by the employer.
• Medical treatment provided to the employee or their family members.
• Use of telephone and mobile phones for official purposes.
• Gifts and vouchers up to a value of Rs. 5,000 per annum.
• Education facilities provided to the employees children up to Rs. 1,000 per month per child.

It is important to note that the taxability of perquisites depends on the nature of the benefit provided by the employer.