Rule 15Published

Rule 15: Valuation of salary perquisites

Rule 15 sets the valuation methods for employment-related perquisites provided to an employee or a household member. Its four tables and additional clauses cover accommodation, vehicles, household benefits, other amenities and employee securities.

Official notified Income-tax Rules, 2026

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Bare law
Introduction
Start with the benefit and the defined salary
Value accommodation using the correct employer and property category
Apply accommodation adjustments and exceptions
Classify the vehicle by ownership, use and engine category
Document official use and multiple-car cases
Household services, utilities, education and transport
Loans, holidays, meals and gifts
Credit cards and club facilities need their own conditions
Separate movable-asset use from ownership transfer
Value employee securities on the prescribed basis
Build a payroll review file
Key takeaways
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Bare law

Rule 15 - Valuation of perquisites
(1) For the purpose of computing the income chargeable under the head "Salaries", the value of perquisites provided by the employer, either directly or indirectly, to the assessee (herein referred to as the employee) or to any member of his household by reason of his employment, shall be determined in accordance with the provisions of this rule.
(2) (a) The value of residential accommodation provided by the employer, for the purpose of section 17(1)(a) and (b), during the tax year, in the circumstances referred in column B of the following Table I, shall be determined in accordance with the column C or column D thereof, as the case may be:
Table I
Sl. No. (A) Circumstances (B) Where accommodation is unfurnished (C) Where accommodation is furnished (D)
(1) Where the accommodation is provided by the Central Government or any State Government, to the employees either holding office or post in connection with the affairs of the Union or of such State. License fee determined by the Central Government or any State Government in respect of accommodation in accordance with the rules framed by such Government as reduced by the rent actually paid by the employee. Value of perquisite is determined as per the provisions of sub-rule (2)(e).
(2)(a) Where the accommodation is provided by any other employer and— (a) where the accommodation is owned by the employer; or (i) 10% of salary in cities having population exceeding forty lakhs as per 2011 census in respect of the period during which the said accommodation was occupied by the employee during the tax year as reduced by the rent, if any, actually paid by the employee; (ii) 7.5% of salary in cities having population exceeding fifteen lakhs but not exceeding forty lakhs as per 2011 census in respect of the period during which the said accommodation was occupied by the employee during the tax year as reduced by the rent, if any, actually paid by the employee; and (iii) 5% of salary in other areas, in respect of the period during which the said accommodation was occupied by the employee during the tax year as reduced by the rent, if any, actually paid by the employee. Value of perquisite is determined as per the provisions of sub-rule (2)(e).
(2)(b) Where the accommodation is provided by any other employer and— (b) where the accommodation is taken on lease or rent by the employer. Actual amount of lease rental paid or payable by the employer or 10% of salary, in respect of the period during which the said accommodation was occupied by the employee during the tax year, whichever is lower, as reduced by the rent, if any, actually paid by the employee. Value of perquisite is determined as per the provisions of sub-rule (2)(e).
(3) Where the accommodation is provided by the employer specified in serial number (1) or (2) in a hotel (except where the employee is provided such accommodation for a period not exceeding in aggregate fifteen days on his transfer from one place to another). Not applicable. Actual charges paid or payable to such hotel or 24% of salary paid or payable for the tax year for the period during which such accommodation is provided, whichever is lower, as reduced by the rent, if any, actually paid or payable by the employee.
(b) The provisions of this sub-rule shall not apply to any accommodation temporarily provided to an employee working at a mining site or an on-shore oil exploration site or a project execution site, or a dam site or a power generation site or an off-shore site; which — (i) having plinth area not exceeding 1000 square feet, is located not less than eight kilometres away from the local limits of any municipality or a cantonment board; or (ii) is located in a remote area. (c) Where on account of his transfer from one place to another, the employee is provided with accommodation at the new place of posting while retaining the accommodation at the other place, the value of perquisite shall be determined with reference to only one such accommodation which has the lower value with reference to Table I for a period not exceeding ninety days and thereafter the value of perquisite shall be charged for both such accommodations as provided in the said Table I. (d) Where the accommodation is owned or taken on lease or rent by the employer and the same accommodation is continued to be provided to the same employee for more than one tax year, the amount calculated in accordance with Table I:Sl. No. 2(a) or (b) shall not exceed the amount so calculated for the first tax year, as multiplied by the amount which is a ratio of the Cost Inflation Index for the tax year for which the amount is calculated and the Cost Inflation Index for the tax year in which the accommodation was initially provided to the employee. (e) For the purposes of this sub-rule, where the accommodation is furnished;– (i) the value of perquisite as determined under Table I: Sl. Nos. 1 and 2. C be increased by 10% per annum of the cost of furniture (including television sets, radio sets, refrigerators, other household appliances, air-conditioning plant or equipment), as reduced by any charges paid or payable for the same by the employee during the tax year; and (ii) if such furniture is hired from a third party, the value of perquisite would be the actual hire charges payable for the same as reduced by any charges paid or payable for the same by the employee during the tax year. (f) For the purposes of this sub-rule, where the accommodation is provided by the Central Government or any State Government to an employee, who is serving on deputation with any body or undertaking under the control of such Government,— (i) the employer of such an employee shall be deemed to be that body or undertaking where the employee is serving on deputation; and (ii) the value of perquisite of such an accommodation shall be the amount calculated in accordance with Table 1: Sl. No. 2(a), as if the accommodation is owned by the employer. (g) For the purposes of clause (d); (i) "Cost Inflation Index" means the index as may be notified by the Central Government under section 72(8)(a); (ii) "first tax year" means the tax year 2023-2024, or the tax year in which the accommodation was provided to the employee, whichever is later.
(3)(a) The value of perquisite by way of use of motor car to an employee by an employer, in the circumstances as referred in column B of the following Table II, shall be determined in accordance with column C or column D thereof, as the case may be:
Table II — VALUE OF PERQUISITE PER CALENDAR MONTH
Sl. No. (A) Circumstances (B) Where cubic capacity of engine does not exceed 1.6 litres or the motor car is an electric vehicle (C) Where cubic capacity of engine exceeds 1.6 litres (D)
(1)(a) Where the motor car is owned or hired by the employer and— (a) is used wholly and exclusively in the performance of his official duties; no value, if the documents specified in sub-rule (3)(c) are maintained by the employer no value, if the documents specified in sub-rule (3)(c) are maintained by the employer;
(1)(b) Where the motor car is owned or hired by the employer and— (b) is used exclusively for the private or personal purposes of the employee or any member of his household and the running and maintenance expenses are met or reimbursed by the employer; actual amount of expenditure incurred by the employer on the running and maintenance of motor car during the relevant tax year including remuneration, if any, paid by the employer to the chauffeur as increased by the amount representing normal wear and tear of the motor car and as reduced by any amount charged from the employee for such use. actual amount of expenditure incurred by the employer on the running and maintenance of motor car during the relevant tax year including remuneration, if any, paid by the employer to the chauffeur as increased by the amount representing normal wear and tear of the motor car and as reduced by an amount charged from the employee for such use.
(1)(c)(i) Where the motor car is owned or hired by the employer and— (c) is used partly in the performance of duties and partly for private or personal purposes of his own or any member of his household and— (i) the expenses on maintenance and running are met or reimbursed by the employer; ₹ 5000 (plus ₹3000, if chauffeur is also provided to run the motor car by the employer) ₹ 7000 (plus ₹3000, if chauffeur is also provided to run the motor car by the employer);
(1)(c)(ii) Where the motor car is owned or hired by the employer and— (c) is used partly in the performance of duties and partly for private or personal purposes of his own or any member of his household and— (ii) the expenses on running and maintenance for private or personal use are fully met by the assessee; ₹ 2000 (plus ₹ 3000, if chauffeur is also provided by the employer to run the motor car by the employer). ₹ 3000 (plus ₹3000, if chauffeur is also provided to run the motor car by the employer).
(2)(a) Where the employee owns a motor car but the actual running and maintenance charges (including remuneration of the chauffeur, if any) are met or reimbursed to him by the employer and— (a) such reimbursement is for the use of the vehicle wholly and exclusively for official purposes; no value, if the documents specified in sub-rule (3)(c) are maintained by the employer no value, if the documents specified in sub-rule (3)(c) are maintained by the employer;
(2)(b) Where the employee owns a motor car but the actual running and maintenance charges (including remuneration of the chauffeur, if any) are met or reimbursed to him by the employer and— (b) such reimbursement is for the use of the vehicle partly for official purposes and partly for personal or private purposes of the employee or any member of his household. the actual amount of expenditure incurred by the employer as reduced by the amount specified in Sl. No. (1)(c)(i) above, if the conditions mentioned in sub-rule (3)(c) are fulfilled. the actual amount of expenditure incurred by the employer as reduced by the amount specified in Sl. No. (1)(c)(i) above, if the conditions mentioned in sub-rule (3)(c) are fulfilled.
(3)(a) Where the employee owns any other automotive conveyance but the actual running and maintenance charges are met or reimbursed to him by the employer and (a) such reimbursement is for the use of the vehicle wholly and exclusively for official purposes; no value, if the documents specified in sub-rule (2)(c) are maintained by the employer not applicable;
(3)(b) Where the employee owns any other automotive conveyance but the actual running and maintenance charges are met or reimbursed to him by the employer and (b) such reimbursement is for the use of vehicle partly for official purposes and partly for personal or private purposes of the employee. the actual amount of expenditure incurred by the employer as reduced by the amount of ₹3000 if the conditions mentioned in sub-rule (3)(c) are fulfilled.
(b) Where an employer owns or hires one or more motor cars and allows the employee or any member of his household to use them for the purposes other than wholly and exclusively in the performance of his duties, the value of perquisite shall be the amount calculated as below: (i) for one car, in accordance with Table II: Sl. No. (1)(c)(i) ;and (ii) for other cars, in accordance with Table II: Sl. No. (1)(b). (c) If the employer or employee claims that the motor vehicle is used solely for official duties or that the actual expenses for running and maintaining the employee-owned motor vehicle for official purposes exceed the deductible amounts in Table II: Sl. No. 2(b) or 3(b), he may claim a higher amount for official use and in this case, the value of the perquisite shall be the actual amount of expenses paid or reimbursed by the employer, minus the higher amount attributed to official use of the vehicle provided that the following conditions are fulfilled: — (i) the employer has maintained complete details of journey undertaken for official purpose which may include date of journey, destination, mileage and the amount of expenditure incurred thereon; and (ii) the employer gives a certificate to the effect that the expenditure was incurred wholly and exclusively for the performance of official duties. (d) For the purposes of this sub-rule, the normal wear and tear of a motor car shall be taken at 10% per annum of the actual cost of the motor car or cars.
(4) The value of benefit provided by the employer to the employee or any member of his household for goods, services or utilities, as referred to in column B of the following Table III, shall be computed in accordance with column C thereof:
Table III
Sl. No. (A) Nature of goods, services or utilities (B) Value of benefit of the goods, services or utilities provided (C)
1. Services of a sweeper, a gardener, a watchman or a personal attendant. The total amount of salary paid or payable by the employer or any other person on his behalf for such services as reduced by any amount paid by the employee for such services.
2(a) (a) Supply of gas, electric energy or water for the consumption of the employee‘s household by purchasing them from any outside agency. The amount paid by the employer to the agency supplying the gas, electric energy or water, as reduced by any amount paid by the employee in respect of such services.
2(b) (b) Supply of gas, electric energy or water for the consumption of the employee‘s household made from resources owned by the employer, without purchasing them from any outside agency The amount of the manufacturing cost per unit incurred by the employer, as reduced by any amount paid by the employee in respect of such services.
3(a) (a) Provision of free or concessional educational facilities for any member of the employee‘s household. The amount of expenditure incurred by the employer in this regard, as reduced by any amount paid or recovered from the employee on that account.
3(b) (b) Provision of free or concessional educational facilities for any member of employee household, where the educational institution is itself maintained and owned by the employer. Cost of such education in a similar institution in or near the locality, as reduced by any amount paid or recovered from the employee on that account, where the cost of such education or value of such benefit per child exceeds ₹3,000 per month.
3(c) (c) Provision of free educational facilities for any member of employees' household in any other educational institution by reason of his employment. Cost of such education in a similar institution in or near the locality, as reduced by any amount paid or recovered from the employee on that account, where the cost of such education or value of such benefit per child exceeds ₹3,000 per month.
4. Provision by an employer who is engaged in the carriage of passengers or goods, to any employee (not being an employee of an airline or the railways) or to any member of his household, for personal or private journey free of cost or at concessional fare, in any conveyance owned, leased or made available by any other arrangement by such employer for the purpose of transport of passengers or goods. Value at which such benefit or amenity is offered by such employer to the public as reduced by the amount, if any, paid by or recovered from the employee for such benefit or amenity.
(5)(a) In terms of provisions contained in section 17(1)(e), the value of other benefits or amenities of the nature referred to in Column B of the following Table IV shall be determined in accordance with column C and subject to conditions provided in Column D thereof:
Table IV
Sl. No. (A) Nature of other benefits or amenities (B) Value of perquisite (C) Conditions (D)
1. Benefit from the provision of interest-free or concessional loan for any purpose made available to the employee or any member of his household during the relevant tax year by the employer or any person on his behalf. It shall be the sum equal to the interest computed at the annual rate charged by the State Bank of India, constituted under the State Bank of India Act, 1955 (23 of 1955), as on the 1st day of the relevant tax year in respect of loans by the bank for the same purpose, using the maximum outstanding monthly balance as reduced by the interest, if any, actually paid by him or any such member of his household. (a) No value would be charged if such loans are made available for medical treatment in respect of diseases specified in rule 18 or where the amount of loans is not exceeding ₹2,00,000 in the aggregate; and (b)where the benefit relates to the loans made available for medical treatment referred to in clause (a), the exemption so provided shall not apply to so much of the loan as has been reimbursed to the employee under any medical insurance scheme.
2. The value of travelling, touring, accommodation and any other expenses paid for or borne or reimbursed by the employer for any holiday availed of by the employee or any member of his household, other than concession or assistance referred to in rule 277. It shall be the sum equal to the amount of the expenditure incurred by such employer in that behalf. (a) Where such facility is maintained by the employer, and is not available uniformly to all employees, the value of benefit shall be taken to be the value at which such facilities are offered by other agencies to the public; or (b) where the employee is on official tour and the expenses are incurred in respect of any member of his household accompanying him, the amount of expenditure so incurred shall be an amenity; or (c) where any official tour is extended as a vacation, the value of such fringe benefit shall be limited to the expenses incurred in relation to such extended period of stay or vacation as reduced by the amount, if any, paid or recovered from the employee for such benefit or amenity.
3. The value of free food and non-alcoholic beverages provided by the employer to an employee. It shall be the amount of expenditure incurred by such employer as reduced by the amount, if any, paid or recovered from the employee for such benefit or amenity. This provision shall not apply to (a) free food and non-alcoholic beverages provided by such employer during working hours at office or business premises or through paid vouchers usable only at eating joints, to the extent the value thereof in either case does not exceed ₹200 per meal; or (b) tea or snacks provided during working hours; or (c) free food and non-alcoholic beverages during working hours provided in a remote area or an off-shore installation.
4. The value of any gift, or voucher, or token (in lieu of gift) received by the employee or by member of his household) on ceremonial occasions or otherwise from the employer. It shall be the sum equal to the amount of such gift. It shall be ‗nil‘, if the value of such gift, voucher or token, as the case may be, is below ₹ 15,000 in aggregate during the tax year.
5. The amount of expenses including membership fees and annual fees incurred by the employee or any member of his household, which is charged to a credit card (including any add-on-card) provided by the employer, or otherwise, paid for or reimbursed by such employer. It shall be the amount taken to be the value of perquisite chargeable to tax as reduced by the amount, if any paid or recovered from the employee for such benefit or amenity. There shall be no value of such benefit, where expenses are incurred wholly and exclusively for official purposes and the conditions specified in sub-rule (5)(b) are fulfilled.
6. The value of benefit to the employee resulting from the payment or reimbursement by the employer of any expenditure incurred (including the amount of annual or periodical fee) in a club by him or by a member of his household. It shall be determined to be the actual amount of expenditure incurred or reimbursed by such employer on that account and the amount so determined shall be reduced by the amount, if any paid or recovered from the employee for such benefit or amenity. (a) Where the employer has obtained corporate membership of the club and the facility is enjoyed by the employee or any member of his household, the value of perquisite shall not include the initial fee paid for acquiring such corporate membership; and (b) the provision given in column C of Sl. No. 6 shall not apply, if such expenditure is incurred wholly and exclusively for business purposes and the following conditions are fulfilled:– (i) conditions in sub-rule (5)(b) are fulfilled; and (ii) use of health club, sports and similar facilities are provided uniformly to all employees by the employer.
7. The value of benefit to the employee resulting from the use by the employee or any member of his household of any movable asset (other than assets already specified in this rule and other than laptops, computers, tablets and mobile phones) belonging to the employer or hired by him. It shall be determined at 10% per annum of the actual cost of such asset or the amount of rent or charge paid or payable by the employer, as the case may be, as reduced by the amount, if any, paid or recovered from the employee for such use.
8. The value of benefit to the employee arising from the transfer of any movable asset belonging to the employer directly or indirectly to the employee or any member of his household. It shall be determined to be the amount representing the actual cost of such assets to the employer as reduced by the cost of normal wear and tear and as further reduced by the amount, if any, paid or recovered from the employee being the consideration for such transfer. The cost of normal wear and tear shall be calculated at the rate of (a) 50% in case of computers and electronic items, by reducing balance method; (b) 20% in the case of motor cars, by reducing balance method; and (c) 10% in case of other assets, of the cost of the asset for each completed year during which such asset was put to use by the employer.
9. The value of any other benefit or amenity, service, right or privilege provided by the employer, except expenses on telephones, including a mobile phone. It shall be determined on the basis of cost to the employer under an arm's length transaction as reduced by the employee's contribution, if any.
(b) For the purposes of clause (a) of Table IV: Sl. Nos. 5 and 6 .C, the following conditions need to be satisfied:– (i) complete details in respect of such expenditure are maintained by the employer which may, inter alia, include the date of expenditure and the nature of expenditure; (ii) the employer gives a certificate for such expenditure to the effect that the same was incurred wholly and exclusively for the performance of official duties.
(6) For the purposes of section 17(1)(d), the fair market value of any specified security or sweat equity share, being an equity share in a company, on the date on which the option is exercised by the employee, shall be determined as follows:– (a) in a case where, on the date of the exercising of the option, the share in the company is listed on a recognised stock exchange, the fair market value shall be the average of the opening price and closing price of the share on that date on the said stock exchange, subject to the provisions of clause (b); (b) in a case where, on the date of exercising of the option, the share is listed on more than one recognised stock exchanges, the fair market value shall be the average of the opening price and closing price of the share on the recognised stock exchange which records the highest volume of trading in the share; (c) in a case where, on the date of exercising of the option, there is no trading in the share on any recognized stock exchange, the fair market value shall be— (i) the closing price of the share on any recognised stock exchange on a date closest to the date of exercising of the option and immediately preceding such date; or (ii) the closing price of the share on a recognised stock exchange, which records the highest volume of trading in such share, if the closing price, as on the date closest to the date of exercising of the option and immediately preceding such date, is recorded on more than one recognised stock exchange; (d) in a case where, on the date of exercising of the option, the share in the company is not listed on a recognised stock exchange, the fair market value shall be such value of the share in the company as determined by a merchant banker on the specified date.
(7) For the purposes of section 17(1)(d), the fair market value of any specified security, not being an equity share in a company, on the date on which the option is exercised by the employee, shall be such value as may be determined by a merchant banker on the specified date.
(8) For the purposes of this rule— (a) "accommodation" includes a house, flat, farm house or part thereof, or accommodation in a hotel, motel, service apartment, guest house, caravan, mobile home, ship or other floating structure; (b) "closing price" of a share on a recognised stock exchange on a date shall be the price of the last settlement on such date on such stock exchange, and where the stock exchange quotes both "buy" and "sell" prices, the closing price shall be the "sell" price of the last settlement; (c) "entertainment" includes hospitality of any kind and also, expenditure on business gifts other than free samples of the employer‘s own product with the aim of advertising to the general public; (d) "hotel" includes licensed accommodation in the nature of motel, service apartment or guest house; (e) "maximum outstanding monthly balance" means the aggregate outstanding balance for each loan as on the last day of each month. (f) "member of household" shall include— (i) spouse; (ii) children and their spouses; (iii) parents; and (iv) servants and dependants; (g) "merchant banker" means category I merchant banker registered with Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992); (h) "opening price" of a share on a recognised stock exchange on a date shall be the price of the first settlement on such date on such stock exchange and where the stock exchange quotes both "buy" and "sell" prices, the opening price shall be the "sell" price of the first settlement; (i) "recognised stock exchange" shall have the same meaning assigned to it in section 2(f) of the Securities Contracts (Regulation) Act, 1956 (42 of 1956); (j) "remote area", specified in sub-rule (1)(b), means any area other than an area which is located— (i) within the local limits of; or (ii) within a distance, measured aerially, of thirty kilometers from the local limits of, any municipality or a cantonment board having a population of one lakh or more based on the 2011 census; (k) "salary" includes the pay, allowances, bonus or commission payable monthly or otherwise or any monetary payment, by whatever name called, from one or more employers, as the case may be, but does not include the following:— (i) dearness allowance or dearness pay, unless it enters into the computation of superannuation or retirement benefits of the employee concerned; (ii) employer's contribution to the provident fund account of the employee; (iii) allowances, which are exempted from payment of tax; (iv) the value of perquisites specified in section 17(1); (v) any payment or expenditure specifically excluded under section 17(2); and (vi) lump-sum payments received at the time of termination of service or superannuation or voluntary retirement, like gratuity, severance pay, leave encashment, voluntary retrenchment benefits, commutation of pension and similar payments; (l) "specified date" means— (i) the date of exercising of the option; or (ii) any date earlier than the date of the exercising of the option, not being a date which is more than one hundred and eighty days earlier than the date of the exercising.

Table I
Sl. No. (A)	Circumstances (B)	Where accommodation is unfurnished (C)	Where accommodation is furnished (D)
(1)	Where the accommodation is provided by the Central Government or any State Government, to the employees either holding office or post in connection with the affairs of the Union or of such State.	License fee determined by the Central Government or any State Government in respect of accommodation in accordance with the rules framed by such Government as reduced by the rent actually paid by the employee.	Value of perquisite is determined as per the provisions of sub-rule (2)(e).
(2)(a)	Where the accommodation is provided by any other employer and— (a) where the accommodation is owned by the employer; or	(i) 10% of salary in cities having population exceeding forty lakhs as per 2011 census in respect of the period during which the said accommodation was occupied by the employee during the tax year as reduced by the rent, if any, actually paid by the employee; (ii) 7.5% of salary in cities having population exceeding fifteen lakhs but not exceeding forty lakhs as per 2011 census in respect of the period during which the said accommodation was occupied by the employee during the tax year as reduced by the rent, if any, actually paid by the employee; and (iii) 5% of salary in other areas, in respect of the period during which the said accommodation was occupied by the employee during the tax year as reduced by the rent, if any, actually paid by the employee.	Value of perquisite is determined as per the provisions of sub-rule (2)(e).
(2)(b)	Where the accommodation is provided by any other employer and— (b) where the accommodation is taken on lease or rent by the employer.	Actual amount of lease rental paid or payable by the employer or 10% of salary, in respect of the period during which the said accommodation was occupied by the employee during the tax year, whichever is lower, as reduced by the rent, if any, actually paid by the employee.	Value of perquisite is determined as per the provisions of sub-rule (2)(e).
(3)	Where the accommodation is provided by the employer specified in serial number (1) or (2) in a hotel (except where the employee is provided such accommodation for a period not exceeding in aggregate fifteen days on his transfer from one place to another).	Not applicable.	Actual charges paid or payable to such hotel or 24% of salary paid or payable for the tax year for the period during which such accommodation is provided, whichever is lower, as reduced by the rent, if any, actually paid or payable by the employee.

Table II — VALUE OF PERQUISITE PER CALENDAR MONTH
Sl. No. (A)	Circumstances (B)	Where cubic capacity of engine does not exceed 1.6 litres or the motor car is an electric vehicle (C)	Where cubic capacity of engine exceeds 1.6 litres (D)
(1)(a)	Where the motor car is owned or hired by the employer and— (a) is used wholly and exclusively in the performance of his official duties;	no value, if the documents specified in sub-rule (3)(c) are maintained by the employer	no value, if the documents specified in sub-rule (3)(c) are maintained by the employer;
(1)(b)	Where the motor car is owned or hired by the employer and— (b) is used exclusively for the private or personal purposes of the employee or any member of his household and the running and maintenance expenses are met or reimbursed by the employer;	actual amount of expenditure incurred by the employer on the running and maintenance of motor car during the relevant tax year including remuneration, if any, paid by the employer to the chauffeur as increased by the amount representing normal wear and tear of the motor car and as reduced by any amount charged from the employee for such use.	actual amount of expenditure incurred by the employer on the running and maintenance of motor car during the relevant tax year including remuneration, if any, paid by the employer to the chauffeur as increased by the amount representing normal wear and tear of the motor car and as reduced by an amount charged from the employee for such use.
(1)(c)(i)	Where the motor car is owned or hired by the employer and— (c) is used partly in the performance of duties and partly for private or personal purposes of his own or any member of his household and— (i) the expenses on maintenance and running are met or reimbursed by the employer;	₹ 5000 (plus ₹3000, if chauffeur is also provided to run the motor car by the employer)	₹ 7000 (plus ₹3000, if chauffeur is also provided to run the motor car by the employer);
(1)(c)(ii)	Where the motor car is owned or hired by the employer and— (c) is used partly in the performance of duties and partly for private or personal purposes of his own or any member of his household and— (ii) the expenses on running and maintenance for private or personal use are fully met by the assessee;	₹ 2000 (plus ₹ 3000, if chauffeur is also provided by the employer to run the motor car by the employer).	₹ 3000 (plus ₹3000, if chauffeur is also provided to run the motor car by the employer).
(2)(a)	Where the employee owns a motor car but the actual running and maintenance charges (including remuneration of the chauffeur, if any) are met or reimbursed to him by the employer and— (a) such reimbursement is for the use of the vehicle wholly and exclusively for official purposes;	no value, if the documents specified in sub-rule (3)(c) are maintained by the employer	no value, if the documents specified in sub-rule (3)(c) are maintained by the employer;
(2)(b)	Where the employee owns a motor car but the actual running and maintenance charges (including remuneration of the chauffeur, if any) are met or reimbursed to him by the employer and— (b) such reimbursement is for the use of the vehicle partly for official purposes and partly for personal or private purposes of the employee or any member of his household.	the actual amount of expenditure incurred by the employer as reduced by the amount specified in Sl. No. (1)(c)(i) above, if the conditions mentioned in sub-rule (3)(c) are fulfilled.	the actual amount of expenditure incurred by the employer as reduced by the amount specified in Sl. No. (1)(c)(i) above, if the conditions mentioned in sub-rule (3)(c) are fulfilled.
(3)(a)	Where the employee owns any other automotive conveyance but the actual running and maintenance charges are met or reimbursed to him by the employer and (a) such reimbursement is for the use of the vehicle wholly and exclusively for official purposes;	no value, if the documents specified in sub-rule (2)(c) are maintained by the employer	not applicable;
(3)(b)	Where the employee owns any other automotive conveyance but the actual running and maintenance charges are met or reimbursed to him by the employer and (b) such reimbursement is for the use of vehicle partly for official purposes and partly for personal or private purposes of the employee.	the actual amount of expenditure incurred by the employer as reduced by the amount of ₹3000 if the conditions mentioned in sub-rule (3)(c) are fulfilled.

Table III
Sl. No. (A)	Nature of goods, services or utilities (B)	Value of benefit of the goods, services or utilities provided (C)
1.	Services of a sweeper, a gardener, a watchman or a personal attendant.	The total amount of salary paid or payable by the employer or any other person on his behalf for such services as reduced by any amount paid by the employee for such services.
2(a)	(a) Supply of gas, electric energy or water for the consumption of the employee‘s household by purchasing them from any outside agency.	The amount paid by the employer to the agency supplying the gas, electric energy or water, as reduced by any amount paid by the employee in respect of such services.
2(b)	(b) Supply of gas, electric energy or water for the consumption of the employee‘s household made from resources owned by the employer, without purchasing them from any outside agency	The amount of the manufacturing cost per unit incurred by the employer, as reduced by any amount paid by the employee in respect of such services.
3(a)	(a) Provision of free or concessional educational facilities for any member of the employee‘s household.	The amount of expenditure incurred by the employer in this regard, as reduced by any amount paid or recovered from the employee on that account.
3(b)	(b) Provision of free or concessional educational facilities for any member of employee household, where the educational institution is itself maintained and owned by the employer.	Cost of such education in a similar institution in or near the locality, as reduced by any amount paid or recovered from the employee on that account, where the cost of such education or value of such benefit per child exceeds ₹3,000 per month.
3(c)	(c) Provision of free educational facilities for any member of employees' household in any other educational institution by reason of his employment.	Cost of such education in a similar institution in or near the locality, as reduced by any amount paid or recovered from the employee on that account, where the cost of such education or value of such benefit per child exceeds ₹3,000 per month.
4.	Provision by an employer who is engaged in the carriage of passengers or goods, to any employee (not being an employee of an airline or the railways) or to any member of his household, for personal or private journey free of cost or at concessional fare, in any conveyance owned, leased or made available by any other arrangement by such employer for the purpose of transport of passengers or goods.	Value at which such benefit or amenity is offered by such employer to the public as reduced by the amount, if any, paid by or recovered from the employee for such benefit or amenity.

Table IV
Sl. No. (A)	Nature of other benefits or amenities (B)	Value of perquisite (C)	Conditions (D)
1.	Benefit from the provision of interest-free or concessional loan for any purpose made available to the employee or any member of his household during the relevant tax year by the employer or any person on his behalf.	It shall be the sum equal to the interest computed at the annual rate charged by the State Bank of India, constituted under the State Bank of India Act, 1955 (23 of 1955), as on the 1st day of the relevant tax year in respect of loans by the bank for the same purpose, using the maximum outstanding monthly balance as reduced by the interest, if any, actually paid by him or any such member of his household.	(a) No value would be charged if such loans are made available for medical treatment in respect of diseases specified in rule 18 or where the amount of loans is not exceeding ₹2,00,000 in the aggregate; and (b)where the benefit relates to the loans made available for medical treatment referred to in clause (a), the exemption so provided shall not apply to so much of the loan as has been reimbursed to the employee under any medical insurance scheme.
2.	The value of travelling, touring, accommodation and any other expenses paid for or borne or reimbursed by the employer for any holiday availed of by the employee or any member of his household, other than concession or assistance referred to in rule 277.	It shall be the sum equal to the amount of the expenditure incurred by such employer in that behalf.	(a) Where such facility is maintained by the employer, and is not available uniformly to all employees, the value of benefit shall be taken to be the value at which such facilities are offered by other agencies to the public; or (b) where the employee is on official tour and the expenses are incurred in respect of any member of his household accompanying him, the amount of expenditure so incurred shall be an amenity; or (c) where any official tour is extended as a vacation, the value of such fringe benefit shall be limited to the expenses incurred in relation to such extended period of stay or vacation as reduced by the amount, if any, paid or recovered from the employee for such benefit or amenity.
3.	The value of free food and non-alcoholic beverages provided by the employer to an employee.	It shall be the amount of expenditure incurred by such employer as reduced by the amount, if any, paid or recovered from the employee for such benefit or amenity.	This provision shall not apply to (a) free food and non-alcoholic beverages provided by such employer during working hours at office or business premises or through paid vouchers usable only at eating joints, to the extent the value thereof in either case does not exceed ₹200 per meal; or (b) tea or snacks provided during working hours; or (c) free food and non-alcoholic beverages during working hours provided in a remote area or an off-shore installation.
4.	The value of any gift, or voucher, or token (in lieu of gift) received by the employee or by member of his household) on ceremonial occasions or otherwise from the employer.	It shall be the sum equal to the amount of such gift.	It shall be ‗nil‘, if the value of such gift, voucher or token, as the case may be, is below ₹ 15,000 in aggregate during the tax year.
5.	The amount of expenses including membership fees and annual fees incurred by the employee or any member of his household, which is charged to a credit card (including any add-on-card) provided by the employer, or otherwise, paid for or reimbursed by such employer.	It shall be the amount taken to be the value of perquisite chargeable to tax as reduced by the amount, if any paid or recovered from the employee for such benefit or amenity.	There shall be no value of such benefit, where expenses are incurred wholly and exclusively for official purposes and the conditions specified in sub-rule (5)(b) are fulfilled.
6.	The value of benefit to the employee resulting from the payment or reimbursement by the employer of any expenditure incurred (including the amount of annual or periodical fee) in a club by him or by a member of his household.	It shall be determined to be the actual amount of expenditure incurred or reimbursed by such employer on that account and the amount so determined shall be reduced by the amount, if any paid or recovered from the employee for such benefit or amenity.	(a) Where the employer has obtained corporate membership of the club and the facility is enjoyed by the employee or any member of his household, the value of perquisite shall not include the initial fee paid for acquiring such corporate membership; and (b) the provision given in column C of Sl. No. 6 shall not apply, if such expenditure is incurred wholly and exclusively for business purposes and the following conditions are fulfilled:– (i) conditions in sub-rule (5)(b) are fulfilled; and (ii) use of health club, sports and similar facilities are provided uniformly to all employees by the employer.
7.	The value of benefit to the employee resulting from the use by the employee or any member of his household of any movable asset (other than assets already specified in this rule and other than laptops, computers, tablets and mobile phones) belonging to the employer or hired by him.	It shall be determined at 10% per annum of the actual cost of such asset or the amount of rent or charge paid or payable by the employer, as the case may be, as reduced by the amount, if any, paid or recovered from the employee for such use.
8.	The value of benefit to the employee arising from the transfer of any movable asset belonging to the employer directly or indirectly to the employee or any member of his household.	It shall be determined to be the amount representing the actual cost of such assets to the employer as reduced by the cost of normal wear and tear and as further reduced by the amount, if any, paid or recovered from the employee being the consideration for such transfer.	The cost of normal wear and tear shall be calculated at the rate of (a) 50% in case of computers and electronic items, by reducing balance method; (b) 20% in the case of motor cars, by reducing balance method; and (c) 10% in case of other assets, of the cost of the asset for each completed year during which such asset was put to use by the employer.
9.	The value of any other benefit or amenity, service, right or privilege provided by the employer, except expenses on telephones, including a mobile phone.	It shall be determined on the basis of cost to the employer under an arm's length transaction as reduced by the employee's contribution, if any.

Introduction

First identify the benefit and the applicable charging provision. Then select the precise Rule 15 category, valuation base and conditions. The same amount or percentage does not apply to every employer-provided benefit.

Rule breakdown

Start with the benefit and the defined salary

Prepare a benefit inventory covering amounts provided directly or indirectly to the employee or household members by reason of employment. The defined household includes the persons listed in sub-rule (8)(f), not only the employee personally.

For percentage-based accommodation calculations, use Rule 15’s salary definition. It includes the listed pay, allowances, bonus, commission and monetary payments but excludes the expressly listed items, including the specified provident-fund contribution, exempt allowances, perquisite values and termination lump sums. Dearness allowance or pay is excluded unless it enters the computation of superannuation or retirement benefits. Do not use total CTC without this reconciliation.

Value accommodation using the correct employer and property category

Table I distinguishes government accommodation, other employer-owned accommodation, rented accommodation and hotels. The non-government owned-property percentages are 10%, 7.5% and 5% of salary, using the stated 2011-census population bands and occupation period. Rented accommodation uses actual lease rental or 10% of salary, whichever is lower, with the specified employee-rent reduction.

Hotel accommodation has its separate actual-charge or 24%-of-salary comparison and the transfer-related exception for an aggregate period not exceeding fifteen days. Government deputation cases have a specific deemed-employer rule; do not automatically use the ordinary government licence-fee method.

Apply accommodation adjustments and exceptions

Temporary accommodation at the listed work sites is outside sub-rule (2) when its size/distance or remote-area condition is met. On transfer while retaining two accommodations, the lower-value accommodation rule lasts for no more than ninety days; the rule then values both.

For the same accommodation continuing with the same employee for more than one tax year, check the prescribed Cost Inflation Index cap and its defined first tax year. Furnished accommodation adds the applicable owned-furniture cost percentage or hired-furniture charges, with the specified employee-payment reduction. Keep these calculations separate rather than treating furniture as automatically covered by rent.

Classify the vehicle by ownership, use and engine category

Table II separates employer-owned or hired cars from employee-owned cars and other automotive conveyances. It then distinguishes wholly official use, exclusively private use and mixed use, including who pays private running costs. Electric vehicles are expressly included in the column for engines not exceeding 1.6 litres.

For employer-paid mixed-use running costs, the specified monthly car values are ₹5,000 or ₹7,000, plus ₹3,000 where the employer also provides a chauffeur. Where the employee fully meets private running and maintenance costs, the stated values are ₹2,000 or ₹3,000, with the stated chauffeur addition. These are different table situations; do not interchange them.

Document official use and multiple-car cases

For the relevant official-use or higher-official-expense claim, keep complete journey details and the employer’s certificate required by sub-rule (3)(c). Employee-owned vehicle reimbursement is not automatically nil because the employee calls it a business expense.

Where the employer permits non-exclusive-official use of one or more cars, sub-rule (3)(b) specifies the mixed-use entry for one car and the private-use entry for other cars. Normal wear and tear for the private-use computation is 10% per annum of actual car cost.

Hypothetical: one employer-owned electric car is used partly officially and partly privately, the employer pays running costs and also provides a chauffeur. The stated Table II(1)(c)(i) monthly amounts are ₹5,000 + ₹3,000 = ₹8,000, assuming that entry applies to the actual facts. This example is not the wholly-official-use case.

Household services, utilities, education and transport

Table III values domestic staff services, purchased or internally supplied utilities, educational facilities and the specified employer-transport benefit. Apply the relevant employee-payment reduction to the correct base.

The ₹3,000-per-child-per-month condition belongs to the specified employer-owned or employment-related educational-facility entries. It is not a blanket education reimbursement deduction for every arrangement. The transport entry expressly excludes airline and railway employees from that entry; it should not be used to make broader claims about every transport benefit.

Loans, holidays, meals and gifts

For the loan entry, the benchmark is the State Bank of India annual rate on the first day of the relevant tax year for the same purpose, applied using the defined maximum outstanding monthly balance. The rule defines that balance by reference to each loan’s month-end outstanding balance. Apply its aggregate-loan and specified-medical-treatment exceptions, including the insurance-reimbursement limitation.

Holiday expenditure has distinct conditions for non-uniform employer facilities, accompanying household members on official tours and extensions of official tours into vacations. Separate the private component from the actual official purpose.

The meal entry provides the stated ₹200-per-meal condition for qualifying working-hours food or beverages at office/business premises or through restricted paid vouchers, plus separate tea/snacks and remote/offshore categories. The gift entry is nil only where aggregate value is below ₹15,000; the wording is not a deduction of ₹15,000 from every gift.

Credit cards and club facilities need their own conditions

For employer-paid credit-card expenses, including the specified fees, check the official-purpose condition and the documentation/certificate requirements before claiming no value. Paying through an employer card does not itself establish official use.

The club entry excludes the initial corporate-membership acquisition fee in its stated circumstances. Its business-purpose exception and listed conditions must be read in full; do not treat every club bill as automatically exempt. Sub-rule (5)(b) requires expenditure details and employer certification for the official-duty position.

Separate movable-asset use from ownership transfer

The use entry generally uses 10% per annum of actual cost or employer hire charges, less the specified employee payment, but expressly excludes laptops, computers, tablets and mobile phones as well as assets already specified in the rule.

The transfer entry instead starts with actual employer cost, subtracts the prescribed normal wear and tear for completed years of use, and subtracts employee consideration. Its rates and methods differ: computers/electronic items use 50% reducing balance, motor cars 20% reducing balance, and other assets the stated 10% cost basis. An exclusion for use does not automatically exclude a later transfer of ownership.

Value employee securities on the prescribed basis

For listed equity shares, the rule generally uses the average opening and closing price on the option-exercise date. It specifies the exchange-volume rule for multiple listings and the nearest preceding trading-date method where there is no trading on the exercise date.

Unlisted equity and specified securities other than equity use a merchant-banker valuation on the specified date. The defined specified date is the exercise date or an earlier date no more than 180 days before it. Do not substitute the share grant date or a valuation without checking the applicable clause.

Build a payroll review file

Record the benefit, statutory category, period, value base, employee contribution and supporting evidence for each entry. Reconcile employer invoices, payroll deductions, asset registers, loans, vehicle logs and security valuations. Review the charging provision and any applicable statutory exclusion separately before completing payroll reporting.

The quotation retains the notified cross-references as printed. In particular, some table or definition references appear internally inconsistent; resolve any reliance on those references against the operative requirements and current official clarification rather than silently treating a guessed correction as enacted text.

Key takeaways

Four separate tables

Accommodation, vehicles, household utilities and other amenities each have their own methods and conditions.

Records can affect valuation

Official-use vehicle and card or club claims depend on the prescribed records and employer certification.

Threshold wording matters

The gift exception uses below ₹15,000, the specified loan exception uses not exceeding ₹2 lakh, and meal relief is subject to a ₹200-per-meal condition.

Usage and transfer differ

Using an employer asset and receiving ownership of it are separate table entries; employee-security valuation has separate clauses.

Practical checklist

Classify each benefit before selecting the valuation table.
Reconcile the defined salary base, benefit period and employee payments.
Maintain official-use journey and expense records with required employer certificates.
Track loan balances, gift aggregates and education or meal conditions precisely.
Retain merchant-banker reports and option-exercise records for securities.

Avoid

Do not treat a benefit’s headline threshold as a universal deduction.
Do not replace salary as defined with unreconciled CTC.
Do not assume use and transfer of an employer asset have identical treatment.
Do not claim official-use relief without the applicable records.

FAQs

Does every employer-provided benefit use a fixed percentage of salary?

No. The rule uses different percentage, actual-cost, market-price, monthly-value and professional-valuation methods for different benefits.

Which car column covers an electric vehicle?

Table II includes an electric vehicle in the column for engines not exceeding 1.6 litres.

Is a gift of exactly ₹15,000 within the nil-value condition?

The notified condition says below ₹15,000 in aggregate during the tax year. Exactly ₹15,000 is not below that amount.

Is every education benefit covered by a ₹3,000 monthly exemption?

No. The condition belongs to the specific Table III entries; apply the actual arrangement and the full entry.

Are employer-provided laptops always outside perquisite valuation?

The movable-asset use entry excludes laptops, computers, tablets and mobile phones. Transfer of ownership is a separate entry and must be checked separately.

Does a wholly official car claim require evidence?

The relevant table entries and sub-rule (3)(c) specify documentation and employer certification conditions.

Which date is relevant for unlisted equity valuation?

Use the merchant-banker valuation on the specified date: the exercise date or an earlier date within the defined 180-day limit.

Glossary

Member of household: The persons specified in sub-rule (8)(f), including spouse, children and their spouses, parents, servants and dependants.
Maximum outstanding monthly balance: The aggregate outstanding balance for each loan as on the last day of each month, as defined in sub-rule (8)(e).
Specified date: For the security-valuation clauses, the exercise date or a date no more than 180 days earlier.

Official sources

Official Gazette Notification 22/2026 — full Rule 15