Preyashi Shrivastava

BA0140044

Perquisites v Allowances What is and is not allowed to be taxes as Income from Salaries

Abstract:

Perquisites and Allowances both form the part of remuneration which is received by an employee
apart from the salary. Although both fall within the purview of Income from Salary, there exists
significant distinction. Salary is taxable whereas both Perquisites and Allowances enjoy certain
exemptions in computing the tax. Allowances are generally fixed monetary benefits as envisaged
in many provisions in Income Tax Act, 1961, viz., sections 32A, 33A, 34 etc. Same goes with
perquisites, which is dealt by section 17. Apart from sections, there are rules such as rule 2BB, 3
prescribes the concept of perquisites and allowances.

The Research paper would be dealing with the differences between both the concepts as title
itself suggests along with thorough analysis of all the sections and rules pertaining to the same.
The researcher will also be focusing on the recent amendments made in IT Rules relating to
above concepts and also whether there exist any dispute regarding the same via various case
laws. The conclusion and suggestions will be given accordingly.