Perks must be mentioned in
salary slips from 2002-2003
The government Wednesday made it mandatory for employers to give details of perks in employees' salary slips from the assessment year 2002-2003 as it feared that employees were claiming deductions on exempted income to lessen their burden on taxable income.
The Budget proposals said certain incomes could not be included while computing the total income as there were exempted under various provisions of the Income Tax Act, but there have been cases where deductions had been claimed with respect to such exempted income.
"This in effect means that the tax incentive given by way of exemptions to certain categories of income is being used to reduce the tax payable on non-exempted income by debiting the expenses incurred to earn the exempted income against taxable income," it said.
Union Finance Minister Yashwant Sinha said, "With economic liberalisation, the pay packages of the salaried class are undergoing many changes. They are being divided into components and forms of perquisites and benefits or amenities provided by employers are assuming new dimensions.
"To align our tax system with the present structure of pay packages, I propose that the value of perquisites, benefit or amenities shall be determined on the basis of their cost to the employer, except with respect to houses and cars, where different criteria will be adopted for simplicity," he added.
Budget 2001
Money
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