|DATE:||(Date of pronouncement)|
|DATE:||August 10, 2012 (Date of publication)|
|Click here to download the judgement (sedco_forex_non_monetary_perk.pdf)|
Tax on employees’ salary is a “non-monetary” perquisite exempt u/s 10(10CC)
The assessee-employer entered into agreements with the employees pursuant to which it agreed to bear the income tax payable by the employees on their salary. The question was whether such tax payment was “income in the nature of a perquisite, not provided for by way of monetary payment, within the meaning of clause (2) of section 17” so as to be exempt in the hands of the employee. HELD by the High Court:
The tax on the salary paid by the employer was a “perquisite” u/s 17(2)(iv) because it was paid in respect of the employees’ obligation and it was not by way of monetary payment to the employees concerned but for or on their account to the Income-tax department. Consequently, it is a “non-monetary” payment of a perquisite to the employee which is eligible for exemption u/s 10(10CC).