The Central Board of Direct Taxes ( CBDT ) issued a notification on August 18. This has increased the income limit for calculating tax-free perquisites in salary income. These new limits are applicable from April 1, 2025 (AY 2026-27).
For example, if your salary income for assessment year (AY) 2026-27 is Rs 3.99 lakh. You are getting interest-free loan or free education facility for children etc. from your employer, then you will not have to pay any income tax on such benefits (perquisites).
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Chartered accountant Suresh Surana told ET that this fixed limit has now been increased to Rs 4 lakh, which was earlier Rs 50,000. The effect of this change is that employees with salary income up to Rs 4 lakh will not fall into the category of ‘specified employees’. Therefore, they will not have to pay perquisite tax on certain benefits (such as interest-free loans or free education for children).
Specified Employees
For these purposes, only those people will be considered as ‘specified employees’ whose salary income is more than Rs 4 lakh. Earlier, the salary income limit for tax-free facilities was Rs 50,000 for ‘specified employees’ and Rs 2 lakh for medical treatment abroad. Now this limit has been increased to Rs 4 lakh for ‘specified employees’ and Rs 8 lakh for medical treatment abroad.
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