Any movable property transferred by the employer to employee directly or indirectly is taxable in the hand of employee. If such movable property is transferred to any member of his/her household then also this provision will be applicable and the value of such movable asset will be treated as perquisite in the hands of employee.
How to derive value of the movable property
Income tax act specifies how to derive value of a movable property transferred by employer to employee. Followings are the assets in which specific provisions of income tax act for calculating perquisite is derived.
Computer and electronic gadgets
If any computer or any electronic gadgets are transferred by the employer to the employee then value of computer gadgets as reduced by depreciation @50% per completed year and value recovered from employee will be the amount of perquisite and taxable in the hands of employee.
As clarified by income tax department, electronic gadgets means data storage and handling devices like computer, digital diaries and printers and does not include household appliances like washing machines, microwave ovens, mixers, hot plates, ovens etc.
Motor Car
Where a motor car is transferred by an employer to employee, the cost of the motor car as reduced by depreciation @ 20% per annum on actual cost of such motor car and amount recovered from the employee will be the value of perquisite.
Other assets
Any other assets transferred by employer to employee except motor car, computer and electronic gadgets will be considered for the calculation of perquisite. In such cases the actual cost of the asset as reduced by the cost of depreciation @ 10% and amount recovered from employee will be treated as value of perquisite.
Computation of value of perquisite
| Sr. No. | Particulars | Amount in Rs. |
| 1 | Actual cost of employer | XXX |
| 2 | Less: Depreciation on the actual cost of asset as prescribed for the asset(WDV method) | (XXX) |
| 3 | Less: Amount recovered from employee on transfer of such asset | (XXX) |
| 4 | Value of perquisite | XXX |
Other relevant points
- WDV method of depreciation calculation is adopted for computer, electronic gadgets and motor car where as straight line method of depreciation calculation is required for any other assets except computer, electronic gadgets and motor cars.
- If any movable asset is provided by an employer to employee for their use or use of any member of household then 10% per annum of the actual cost of such asset will be considered as value of perquisite and taxable in the hands of employee. If such asset is hired by the employer then the rend paid by the employer for such asset will be considered as perquisite
Any amount recovered from employee for use of these assets will be deducted from the value as arrived above.
It has been clarified that laptop or computer provided by the employer to employee for use will not be considered for income tax purpose and as such the value of perquisite will be nil.
- Motor car provided by employer to employee for use will not be covered under this provision. For details on this please read this article on motor car.
Please provide any sample how to compute of completed years while calculating of moveable asset in Income from Salary. Please help me this. Really I am confused on this.
It is the period commencing from date of acquisition of asset by employer to such completed years (12 months) up to which asset is transferred to employee.The period which have to be counted will be of 12 months not in part.
Eg. Date of acquisition of asset is 12/07/2013 & it is transferred to employee on 13/12/2015 then completed years are 2 years upto 12/07/2015.The period from 13/07/2015 to 13/12/2015 is not to be considered at all.