Landmark Cases on Salary and Perquisites
11 decisions, ranked by how many judgments on BharatTax rely on them.
Fixed medical allowances, including cash medical benefits, are treated as medical benefits eligible for exemption when the assessee is satisfied that expenditure has been actually incurred or is to be incurred.
Fixed medical allowance or cash medical benefits are considered expenditure, whether actually incurred or to be incurred, for the purpose of their tax treatment, aligning with the CBDT's understanding of such allowances.
An employer is not statutorily obligated to collect evidence from employees regarding the actual utilization of amounts paid towards leave travel concession or conveyance allowance, unless specific requirements are mandated by law or a CBDT circular.
Allotment of shares to employees under an Employee Stock Option Plan (ESOP) before April 1, 2000, is not a taxable perquisite if the benefit's value is unascertainable at the time of option exercise due to conditions like a lock-in period.
An assessee-employer is not bound to collect and verify proof of journey and actual expenditure incurred for claiming exemptions under Section 10(5) (LTA) and Section 10(14) (special allowances) before granting such exemptions to employees, as there is no such requirement in law.
A cash medical benefit, understood as a fixed medical allowance, covers expenditure that is both actually incurred and expenditure to be incurred, often in line with CBDT guidance on its exemption.
Cash medical benefits paid by an employer to its employees may not constitute a taxable perquisite under Section 17(2) of the Income-tax Act, 1961, and therefore, an employer may not be obligated to deduct tax at source under Section 192 on such payments.
A 'perquisite' is a personal advantage derived from employment, not a mere reimbursement of necessary expenses.
The definition of 'income' under section 2(24) is inclusive, adding artificial categories without losing its natural connotation. Perquisites under section 17(2) are taxable as 'salary' when paid by an employer on behalf of an employee to discharge an obligation the employee would otherwise bear.
Employees of Public Sector Undertakings (PSUs) and nationalized banks are not considered government employees for the purpose of exemption under section 10(10AA) of the Income Tax Act, 1961, and are not discriminated against when compared to Central and State Government employees.
