Interest free or concessional loans:
It is common
practice, particularly in financial institutions, to provide interest
free or concessional loans to employees or any member of his household.
The value of perquisite arising from such loans would be the excess of
interest payable at prescribed interest rate over interest, if any,
actually paid by the employee or any member of his household. The
prescribed interest rate would now be the rate charged per annum by the
State Bank of India as on the 1st day of the relevant financial year in
respect of loans of same type and for the same purpose advanced by it to
the general public. Perquisite value would be calculated on the basis
of the maximum outstanding monthly balance method. For valuing
perquisites under this rule, any other method of calculation and
adjustment otherwise adopted by the employer shall not be relevant.
However, small loans up to Rs. 20,000/- in the aggregate
are exempt. Loans for medical treatment specified in Rule 3A are also
exempt, provided the amount of loan for medical reimbursement is not
reimbursed under any medical insurance scheme. Where any medical
insurance reimbursement is received, the perquisite value at the
prescribed rate shall be charged from the date of reimbursement on the
amount reimbursed, but not repaid against the outstanding loan taken
specifically for this purpose.
