A Mixed Bag

This is the concluding part of our series on the recently amended rules on perquisites and payments

Finance Minister Yashwant Sinha has changed many of the ground rules relating to perquisites. In the fourth and last part of our series, we take a detailed look at the implications of the latest changes.

Credit cards

Any expenditure, including membership and annual fees, charged to a credit card and reimbursed by the employer will be the value of the perquisite chargeable to tax.

Comments: The draft had similar provisions. However, it had a provision that 30 per cent of the amount would be allowed as official entertainment even if records were not kept. Now, as in the case of motor vehicles, a detailed log of the official use has to be maintained, endorsed by the employee and his supervising authority. The old rule did not even mention credit cards possibly because it was a new phenomenon.

However, it was definitely covered by the general rule