Rule 3(g) of Income-tax Rules - Valuation of perquisite on account of services of household servants

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....ble perquisite in the hands of the employee on account of the services of gardeners, night watchmen and sweepers provided by the employer should be calculated on the following ad hoc basis :— (i) Sweeper - 75 per cent of actual wages or Rs. 60 p.m., whichever is less; (ii) Gardener; and (iii) Watchman - 50 per cent of actual wages or Rs. 60 p.m., whichever is less. 2. The Board has receive....

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....tation with the Ministry of Law has re-examined the question of taxability of the salaries paid to the gardeners of the buildings belonging to the employers and occupied by the employees as a perquisite. Section 17(2)(iv) provides that the term "perquisite" includes "any sum paid by the employer in respect of any obligation which but for such payment would have been payable by the assessee". Hence....

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....ount spent on the salary of a gardener by the employer does not represent a sum paid by the employer in respect of any obligation which, but for such payment, would have been payable by the employee. The payment of salary to a gardener as such cannot be regarded as a perquisite so as to justify that amount being taxed in the hands of the employees. However, the expenses incurred by way of maintena....