Skip to content

CA Intermediate · Taxation · Salaries

On 1 April 2026, Anita's employer, a private company, gave her an Rs 12,00,000 loan at 6% p.a. for personal use. The SBI rate for similar loans on 1 April 2026 was 10% p.a. Anita repaid Rs 4,00,000 on 31 October 2026 and nothing else during the year. Interest is charged on the monthly outstanding balance at the end of each month. What is the value of the taxable perquisite for tax year 2026-27?

Rs 40,000 is the perquisite. The loan is taxable because it exceeds the small-loan limit, and the benefit is the 4% difference between the SBI rate and the rate charged. The monthly balance was Rs 12 lakh for six months and Rs 8 lakh for six months, an average of Rs 10 lakh, so the benefit is 4% of that.

  1. ARs 40,000Correct
  2. BRs 48,000
  3. CRs 32,000
  4. DRs 1,00,000

Explanation

The balance at the end of each month from April to September is 12,00,000 (6 months); from October to March it is 8,00,000 (6 months, as repayment was made on 31 October). The interest differential is 10% - 6% = 4%. Perquisite = 4% x (12,00,000 x 6 + 8,00,000 x 6)/12 = 4% x 10,00,000 = Rs 40,000. Using the 4% differential on 12,00,000 for the whole year gives Rs 48,000, which ignores the repayment.

Did you get it right without looking?

One question tells you little. A timed set on Salaries shows your real accuracy, how long you take and where you lose marks.

Practise SalariesFree diagnostic mock

More Salaries questions