Free domestic help a taxable perquisite

S.C. Vasudeva

Q. My company has provided me domestic servants who are being paid by the employer. Will the amount paid by the company in respect of such domestic servants be added to my salary? If so, what is the amount so includible?

— Brij Mohan

A. In accordance with the provisions of the Act, free domestic help will be considered a perquisite and value thereof shall be the actual cost to the employer. The actual cost would be the total amount of salary paid or payable by the employer or any other person on his behalf for such services as reduced by any amount paid by the employee for such services. Thus in your case, the amount includible in salary would be the actual amount paid to the domestic servants by the employer.

Q. Thanks a lot for answering my query which was published in The Tribune dated February 9, 2009. But (b) part of my query is still unanswered i.e. can I show an arrear of Rs 56,580 in my previous years’ savings after depositing in PPF etc in revised IT return of financial years 2006-07 and 2007-08.

In financial years 2006-07 and 2007-08, I had savings of Rs 80,000 under Section 80C and this arrear is for the period January 1, 2006 to September, 2008. Please clarify.

— Yogesh Sharma

A. Deduction in respect of savings scheme specified under Section 80C of the Income-tax Act, 1961 (The Act) is allowable in case payment towards such savings scheme is made before March 31 of the previous year. For example, in case savings for the financial year 2006-07 has to be claimed as deduction against total income for the said financial year, payment towards the savings scheme should be made before March 31, 2007. Therefore, savings made up to March 31, 2007 and or March 31, 2008, would be considered for deduction in respect of income declared for those financial years in the revised return. The facts in the query suggest that the arrears have been received in the year ended March 31, 2009. In such a case, payments for saving scheme made after April 1, 2008 and before March 31, 2009 would be considered, if the amount of arrears is included in the total income for the financial year 2008-09.

Q. You had clarified in a query dated March 16, 2015 that family pension is divisible among legal heirs of the deceased. What is the procedure to divide it among the legal (adults & minor) heirs? Please advise:

(a) Whether the interest accrued on such share of the minor is to be clubbed with the income of the surviving parent.

(b) Whether any interest accrued on the share of minor received from other funds of the deceased is to be clubbed with the income of the surviving parent.

— Surinder Pal

A. Interest accrued on share of family pension shall be clubbed with the income of the surviving parent in accordance with the provisions of Section 64(IA) of the Act. Interest accrued on the share of minor from other funds of the deceased shall also be clubbed with the income of the surviving parent.