The Finance Bill, 2025 introduces significant changes to Section 17 of the Income Tax Act, redefining the valuation and exemption criteria for perquisites. Below are the key amendments:
- Amendment to Section 17(2)(iii) – Perquisites for Specified Employees
The value of benefits or amenities provided free of cost or at a concessional rate to a Specified Employee is considered a perquisite.
Who is a Specified Employee?
- Director of the company
- Employee with a substantial interest in the company
- Employee with salary (excluding other monetary amenities) exceeding ₹50,000 per annum
Key Amendment
- The Finance Bill, 2025 substitutes “exceeding ₹50,000 per annum”
with “Such amount as may be prescribed”
- Amendment to Section 17(2) – Exemptions on Overseas Medical & Travel Expenditure
The following employer-incurred expenses outside India were not treated as perquisites, subject to conditions:
- Medical treatment expenses of the employee or family member
- Travel and stay expenses for the employee or family member
- Travel and stay expenses for one attendant accompanying them
Conditions for Exemption
- Approval by RBI
- Employee’s Gross Total Income < ₹2,00,000 per annum
Key Amendment
- The Finance Bill, 2025 replaces Employee’s Gross Total Income < ₹2,00,000 per annum with “Such amount as may be prescribed.”
