A Comparative Analysis of Perquisite Provisions: Income Tax Bill, 2025 vs Income Tax Act, 1961 Clause 17 Perquisite. - Income Tax Bill, 2025

Clause 17 Perquisite. Income Tax Bill, 2025 1. Introduction The Income Tax Bill, 2025 proposes significant changes to the definition and treatment of perquisites compared to the existing provisions u/s 17(2) of the Income Tax Act, 1961 . The new provisions aim to streamline and modernize the taxation of perquisites while maintaining certain key exemptions. 2. Key Structural Changes 2.1 Organization and Format The new Bill presents a more organized structure with clear subsections and better categorization of perquisites The language has been simplified and modernized Explanations have been integrated into the main provisions rather than being separate 3. Substantive Changes 3.1 Accommodation-Related Perquisites Key Changes: The Bill consolidates provisions related to rent-free and concessional accommodation Removes detailed explanations about computation methods, leaving them to be prescribed Eliminates specific provisions about furnished accommodation and hotel accommodation 3.2 Benefits and Amenities Notable Modifications: Streamlines the provisions regarding benefits provided to directors and employees Removes the monetary threshold of Rs. 50,000 present in the old Act Introduces a prescribed amount approach for determining applicable cases 3.3 Contribution Limits Standardization: Introduces a uniform limit of Rs. 7.5 lakhs for aggregate employer contributions to various funds Combines provisions for different types of funds under a single clause Includes new provisions for annual accretion calculations 4. Exemptions and Exclusions 4.1 Medical Benefits Retained Exemptions: Treatment in employer-maintained hospitals Treatment in government/approved hospitals Medical insurance premium payments New Features: Removes the previous monetary ceiling on medical reimbursements Streamlines the conditions for overseas medical treatment 5. Practical Implications 5.1 For Employers Simplified compliance requirements Clearer guidelines for perquisite valuation Uniform treatment of various benefits 5.2 For Employees More transparent perquisite taxation structure Consolidated limits for employer contributions Enhanced clarity on exemptions 6. Conclusion The proposed changes represent a significant modernization of perquisite taxation, focusing on: Simplification of provisions Standardization of limits Better clarity in implementation Reduced complexity in compliance Full Text : Clause 17 Perquisite.