Rules 3C and 3D has been inserted, which prescribe new income thresholds for claiming exemptions on perquisites. Rule 3C sets the salary income threshold at Rs. 4,00,000 for section 17(2)(iii)(c). It provides that ‘Perquisite’ include the value of any benefit or amenity granted or provided free of cost or at concessional rate, by any employer to an employee, whose income under the head ‘Salaries, exclusive of the value of all benefits or amenities not provided for by way of monetary payment, exceeds (earlier limit fifty thousand rupees).
Rule 3D sets the gross total income threshold at Rs. 8,00,000 for clause (vi) of Proviso to section 17(2)(vi). This Proviso provides that ‘Perquisite’ does not include any expenditure incurred by the employer on medical treatment outside India, and travel and stay abroad including that of attendant, subject to the condition that the expenditure on travel shall be excluded from perquisite only in the case of an employee whose gross total income, does not exceed (earlier limit two lakh rupees).
Earlier, these limits were provided in the relevant sections of Income Tax Act itself. However, Finance Act 2025 amended these sections to provide ‘such amount as may e prescribed’. Thus, these limits have now been prescribed in the Income Tax Rules, effective from Assessment year 2026-27 relevant to Financial year 2025-26.