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CS Professional · Advanced Direct Tax Laws and Practice · Income Tax Implication on Specified Transactions

Under section 533(2) of the Income-tax Act, 2025, rules may provide for the determination of the value of any perquisite chargeable to tax. On what basis is such value determined?

Perquisite valuation rules are framed by the Board in such manner and on such basis as appears to it to be proper and reasonable. The Act gives this discretion to the Board rather than fixing employer cost, an officer's judgment, or a flat percentage.

  1. AIn such manner and on such basis as appears to the Board to be proper and reasonableCorrect
  2. BStrictly at the cost incurred by the employer in all cases
  3. CAt the market value fixed by the Assessing Officer in each case
  4. DAt a flat percentage of salary fixed by the Central Government by statute

Explanation

Clause (c) of section 533(2) empowers rules for valuing perquisites in such manner and on such basis as appears to the Board to be proper and reasonable. It does not mandate employer cost, Assessing Officer discretion, or a statutory flat percentage.

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