New Delhi, Aug. 25 -- The definition of perquisite under the Income Tax Act's Section 17(2) plays a crucial role in computing an employee's taxable salary. Perquisites represent benefits or amenities provided by employers, often in non-cash form, that add value to the overall compensation package.

free accommodation, concessional housing, employer-paid medical reimbursements, insurance premiums, or stock options. While such benefits may not directly increase an employee's take-home pay, they constitute real economic value and are therefore subject to tax in specified cases.

Perquisites under Section 17(2) can broadly be grouped into two categories:

The first relates to perquisites provided free of cost or at concessional rates. Classic...