Under rule 15 of the Income-tax Rules, 2026, a car owned or hired by the employer and used for both office and private use, with the employer paying running costs, is valued at ₹5,000 a month (engine up to 1.6 litres or electric) or ₹7,000 (above 1.6 litres), plus ₹3,000 if a chauffeur is provided. Free meals are not taxed up to ₹200 per meal. Gifts are nil if below ₹15,000 in the year. Interest-free loans are not taxed where loans total up to ₹2,00,000. Add perquisite values to salary for TDS, or pay the tax on non-monetary perquisites yourself under section 392(2).
Rule 15 values at a glance
| Perquisite | Value for tax (per rule 15, Income-tax Rules, 2026) |
|---|---|
| Employer car, official use only, with log | Nil |
| Employer car, mixed use, employer pays running costs | ₹5,000 a month (≤ 1.6 litres or EV); ₹7,000 (> 1.6 litres); + ₹3,000 chauffeur |
| Employer car, mixed use, employee pays private running | ₹2,000 / ₹3,000 a month; + ₹3,000 chauffeur |
| Free food during working hours or meal vouchers | Nil up to ₹200 per meal |
| Gift, voucher or token | Nil if below ₹15,000 in aggregate in the tax year; otherwise full amount |
| Interest-free or concessional loan | Interest at SBI rate on 1 April for the same purpose, on maximum monthly balance; nil if loans total ≤ ₹2,00,000 |
Worked example
Meera, a sales manager, has a company hatchback (1.2 litres) used for work and personal trips; the company pays fuel and has no chauffeur. She also gets a Diwali voucher of ₹10,000 and a ₹1,50,000 interest-free laptop loan.
| Item | Working | Taxable value |
|---|---|---|
| Car | ₹5,000 × 12 months | ₹60,000 |
| Voucher | Below ₹15,000 | Nil |
| Loan | Aggregate ₹1,50,000, not over ₹2,00,000 | Nil |
| Added to salary | ₹60,000 |
If the car had a 1.6-litre-plus engine and a chauffeur, the value would be (₹7,000 + ₹3,000) × 12 = ₹1,20,000.
Points to get right
- Statement to employees: section 392(5)(a) requires the employer to give the employee particulars of perquisites and their value.
- Retirement contributions: employer contributions to PF, NPS and superannuation together above ₹7,50,000 a year are taxable as perquisites, as the department's guidance explains.
- Mobile phone and laptop given for work are not taxed.
- Both regimes: perquisites are taxed under both; the new regime does not exempt them.
FundRaksha HR lets you add perquisites to the salary structure so their value flows into monthly TDS and the Form No. 130 computation. See TDS on salary.
Sources
Last reviewed: 2026-10-21. Information for Indian businesses; not legal advice.