CoolInterview.com - World's Largest Collection of Interview Questions & Answers, FAQs, queries, sample papers, exam papers, dumps, what, why, how, where, when questions
Our Services
Get 9,000 Interview Questions & Answers in an eBook.




Get it now !!
Send your Resume to 6000 Companies
Perquisite Tax Interview Questions & Answers - Learning Mode
COOLINTERVIEW.COM TAX INTERVIEW QUESTIONS PERQUISITE TAX INTERVIEW QUESTIONS QUESTIONS & ANSWERS - LEARNING MODE

Perquisite Tax Interview Questions & Answers - Learning Mode

Earlier to Perquisite Tax we had tax called FBT (Fringe Benefit Tax) which was abolished in 2009, this tax is on benefit given by employer to employee. E.g If your company provides you non-monetary benefits like car with driver, club membership, ESOP etc. All this benefit is taxable under perquisite Tax. In case of ESOP The employee will have to pay tax on the difference between the Fair Market Value (FMV) of the shares on the date of exercise and the price paid by him/her.

Try Perquisite Tax Interview Questions & Answers - Exam Mode

1

Sort By : Latest First | Oldest First | By Rating

Perquisite Tax Interview Questions & Answers - Learning Mode
Try Perquisite Tax Interview Questions & Answers - Exam Mode
Question: How are Perquisites taxed and who pays that Tax?

Answer: According to the Finance Act, 2005, perquisites are taxed by the government in case these perks are provided or are deemed to be provided to employees by employers. The rate at which perquisites are taxed is 30% of the value of fringe benefits.

The perquisite tax is paid by the employer who furnishes these fringe benefits to employees. It can be a company, a firm, an association of persons or body of individuals. Source: CoolInterview.com
Question: What is included in Fringe Benefits and how are they taxed?

Answer: Introduction:

The Finance Act 2005 has introduced a new tax called Income-tax on fringe benefits w.e.f. 01.04.2006. This shall be in the form of additional income tax levied on fringe benefits provided or deemed to have been provided by an employer to his employees during the previous year.

Rate of Tax :-

The tax on fringe benefits shall be levied at the rate of 30% on the value of fringe benefits provided.

Liability to Pay: -

The liability to pay this tax is t Source: CoolInterview.com
Question: What is Salary and what does Salary include?

Answer: Salary is the remuneration received by or accruing to an individual, periodically, for service rendered as a result of an express or implied contract. The actual receipt of salary in the previous year is not material as far as its taxability is concerned. The existence of employer-employee relationship is the sine-qua-non for taxing a particular receipt under the head ?salaries.? For instance, the salary received by a partner from his partnership firm carrying on a business is not chargeable as Source: CoolInterview.com
Question: What are all the Perquisites which are Exempted in all cases?

Answer: 1) Leave Travel Concession subject to conditions & actual spent only for travels.

2) Computer/ Laptop provided for official / personal use.

Allotment Calculator Tax Ration Professional Tax Provident Fund Computation Supplys



All Cases Annuals Car Allotment Calculator Tax Ration Professional Tax

Initial Fees pai Source: CoolInterview.com
Question: My employer reimburses to me all my expenses. Will they be considered as Perquisites?

Answer: ​Yes, these are in the nature of perquisites and should be valued as per the rules prescribed in this behalf.​​ Source: CoolInterview.com
Question: What are all the Perquisites which are taxable only in the hands of specified employees?

Answer: Car owned by employer but used by employee both for personal and official purpose.

Gas and Electricity facility.

Education facility for children.

Free Transport Allowance by employer engaged in Transport Business.

Service of Domestic servant provided by employer. Source: CoolInterview.com
Question: What are different types of Perquisites based on the level of taxes applicable on them?

Answer: Depending upon the tax that is levied on perquisites these can be classified into the following three heads:-

Taxable Perquisites:

Some of the perquisites that are taxable in nature are rent-free accommodation, supply of gas, water and electricity, professional tax of employee, reimbursement of medical expense, and salary of servant employed by employee. Taxable perquisites also include any other fringe benefit provided by employer to employee like free meals, gifts exceedi Source: CoolInterview.com
Question: What are Perquisites?

Answer: Perquisites are benefits received by a person as a result of his/her official position and are over and above the salary or wages. These fringe benefits or perquisites can be taxable or non-taxable depending upon their nature.

A lot of benefits and perks which come in addition to an individual?s salary are grouped under fringe benefits or perks. These components are taxed separately from the employer?s account so as to maintain transparency and accountability.

Perquisite may be def Source: CoolInterview.com
Question: What are all the Perquisites which are taxable in all cases?

Answer: Perquisites is a gain or profit incidentally made from employment in addition to regular salary or wages. Following are few perquisites which shall be taxable:-

Rent Free Accommodation

Concessional Rent House

Obligation of employee met by Employer. Amount paid by Employer regarding:-

Supply of Gas, Electricity & Water

Free or Concessional Education Facilities of Children

Income Tax of employee

Profession Source: CoolInterview.com
Question: Which are the perquisites exempted from Income Tax?

Answer: Some instances of perquisites exempt from tax are given below:-

Provision of medical facilities (Provision to Sec. 17(2)): Value of medical treatment in any hospital maintained by the Government or any local authority or approved by the Chief Commissioner of Income-tax. Besides, any sum paid by the employer towards medical reimbursement other than as discussed above is exempt upto Rs.15,000/-.

Perquisites allowed outside India by the Government to a citizen of India for rendering s Source: CoolInterview.com
Question: Which are the Perquisites exempted from Income Tax?

Answer: Some instances of Perquisites exempt from tax are given below:-

Provision of medical facilities (Provision to Sec. 17(2)): Value of medical treatment in any hospital maintained by the Government or any local authority or approved by the Chief Commissioner of Income-tax. Besides, any sum paid by the employer towards medical reimbursement other than as discussed above is exempt upto Rs.15,000/-.

Perquisites allowed outside India by the Government to a citizen of India for rendering s Source: CoolInterview.com
Question: What are some examples of the most common Perquisites and their Taxation?

Answer: Some of the most popular perquisites provided by a major percentage of companies to their employees are accommodation, cars and stock options. Let us see how these perks are taxed and how is this tax calculated:-

Company provided Accommodation:

A lot of employees are provided leased accommodation option by their employers. This cost of accommodation is taxable and is a perk offered by the company. The tax will however depend upon whether the place is rented, owned or leased by the Source: CoolInterview.com
Question: What are allowances and which allowances are exempt?

Answer: Allowance is defined as a fixed quantity of money or other substance given regularly in addition to salary for meeting specific requirements of the employees. As a general rule, all allowances are to be included in the total income unless specifically exempted. Exemption in respect of following allowances is allowable to the extent mentioned against each:-

House Rent Allowance:- Provided that expenditure on rent is actually incurred, exemption available shall be the least of the following Source: CoolInterview.com

1



India News Network
Latest 20 Questions
Payment of time- barred debt is: (a) Valid (b) Void (c) Illegal (d) Voidable
Consideration is defined in the Indian Contract Act,1872 in: (a) Section 2(f) (b) Section 2(e) (c) Section 2(g) (d) Section 2(d)
Which of the following is not an exception to the rule, "No consideration, No contract": (a) Natural love and affection (b) Compensation for involuntary services (c) Completed gift (d) Agency
Consideration must move at the desire of: (a) The promisor (b) The promisee (c) The promisor or any other party (d) Both the promisor and the promisee
An offer which is open for acceptance over a period of time is: (a) Cross Offer (b) Counter Offer (c) Standing Offer (d) Implied Offer
Specific offer can be communicated to__________ (a) All the parties of contract (b) General public in universe (c) Specific person (d) None of the above
_________ amounts to rejection of the original offer. (a) Cross offer (b) Special offer (c) Standing offer (d) Counter offer
A advertises to sell his old car by advertising in a newspaper. This offer is caleed: (a) General Offer (b) Special Offer (c) Continuing Offer (d) None of the above
In case a counter offer is made, the original offer stands: (a) Rejected (b) Accepted automatically (c) Accepted subject to certain modifications and variations (d) None of the above
In case of unenforceable contract having some technical defect, parties (a) Can sue upon it (b) Cannot sue upon it (c) Should consider it to be illegal (d) None of the above
If entire specified goods is perished before entering into contract of sale, the contract is (a) Valid (b) Void (c) Voidable (d) Cancelled
______________ contracts are also caled contracts with executed consideration. (a) Unilateral (b) Completed (c) Bilateral (d) Executory
A offers B to supply books @ Rs 100 each but B accepts the same with condition of 10% discount. This is a case of (a) Counter Offer (b) Cross Offer (c) Specific Offer (d) General Offer
_____________ is a game of chance. (a) Conditional Contract (b) Contingent Contract (c) Wagering Contract (d) Quasi Contract
There is no binding contract in case of _______ as one's offer cannot be constructed as acceptance (a) Cross Offer (b) Standing Offer (c) Counter Offer (d) Special Offer
An offer is made with an intention to have negotiation from other party. This type of offer is: (a) Invitation to offer (b) Valid offer (c) Voidable (d) None of the above
When an offer is made to the world at large, it is ____________ offer. (a) Counter (b) Special (c) General (d) None of the above
Implied contract even if not in writing or express words is perfectly _______________ if all the conditions are satisfied:- (a) Void (b) Voidable (c) Valid (d) Illegal
A specific offer can be accepted by ___________. (a) Any person (b) Any friend to offeror (c) The person to whom it is made (d) Any friend of offeree
An agreement toput a fire on a person's car is a ______: (a) Legal (b) Voidable (c) Valid (d) Illegal
Cache = 0.0625 Seconds