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).
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.
