Concessional housing-loan interest is not a taxable perquisite where legislative history shows no charging intent.

A concessional housing-loan interest benefit provided by an employer to an employee was examined for taxability as a perquisite under section 17(2)(iii) of the Income-tax Act, 1961. The revenue treated the difference between market interest and concessional interest as taxable, but the legislative history of the later insertion and subsequent deletion of clause (vi) in section 17(2) indicated that Parliament did not intend to bring such housing-loan interest concession within the charging ambit. The concessional loan benefit was therefore not taxable as a perquisite, and the employee's claim succeeded on this issue.

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Issues: Whether the concessional rate of interest on a housing loan granted by an employer to an employee constituted a perquisite chargeable to tax under section 17(2)(iii) of the Income-tax Act, 1961.

Analysis: The rate difference between the market interest and the concessional interest charged by the employer was treated by the revenue as a taxable perquisite. However, the statutory position was examined in the light of the later insertion of clause (vi) in section 17(2), which sought to include such interest concession within the definition of perquisite for housing loans, followed by its deletion before it came into force. That legislative sequence indicated that Parliament did not intend to bring the benefit within the charging ambit of section 17(2).

Conclusion: The concessional loan benefit was not taxable as a perquisite under section 17(2)(iii), and the assessee succeeded on this issue.

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