Click here to Download the Value of Perquisite (Loan) Calculator U/s 17(2)
Interest free loan/Loan at concessional rate of interest :
If a loan is given to an employee (or any member of his household), interest
thereon is a perquisite chargeable to tax. It is taxable in hands of all employees (whether specified or not) on the following basis :
1) Find out the ‘maximum outstanding monthly balance’ (i.e. the aggregate outstanding balance of each loan as on the last day of each month)
2) Calculate interest on loans charged at the rate applicable to the similar loans as prescribed by State Bank of India as on the 1st day of April of the relevant previous year (e.g. 1st April 09 for A Y 2010-11) on the amount derived
in step 1 XXX
3) Less: Interest on loans charged by Employer, if any XXX
4) Balance amount is the taxable non- monetary
perquisite on concessional loans XXX
Note: Exemption is given to the above rule in case of following situations :
1. When the amount of the original loan in the aggregate does not exceed Rs. 20,000/-.
2. If a loan is taken for medical treatment in respect of diseases specified in Rule 3A.(the exemption is not available to the amount of the loan that has been reimbursed to the employee under any medical insurance
scheme.)
