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CA Intermediate · Taxation · Salaries

Kavita works for a private company. On 1 April 2026 her employer gave her an interest-free loan of Rs 12,00,000 to buy a flat, not related to any specified medical treatment. She repaid Rs 4,00,000 on 30 September 2026 and nothing else during the year. She paid the employer Rs 24,000 as interest during the year. Assume the SBI rate on 1 April 2026 for similar loans is 10% per annum and compute interest on the monthly outstanding balance. What is the taxable perquisite for tax year 2026-27?

The taxable perquisite is Rs 76,000. Interest at the SBI rate of 10% on the monthly outstanding balance is Rs 60,000 for six months on Rs 12 lakh and Rs 40,000 for six months on Rs 8 lakh, totalling Rs 1,00,000. Deducting the Rs 24,000 she paid leaves Rs 76,000.

  1. ARs 76,000Correct
  2. BRs 96,000
  3. CRs 1,00,000
  4. DRs 1,20,000

Explanation

The outstanding balance was Rs 12,00,000 for April to September (6 months) and Rs 8,00,000 for October to March (6 months). Interest at 10% = 12,00,000 x 10% x 6/12 = 60,000 plus 8,00,000 x 10% x 6/12 = 40,000, total Rs 1,00,000. Less interest actually paid Rs 24,000, the perquisite is Rs 76,000. Option C ignores the interest she paid, and option D applies interest on the full loan for the whole year.

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