The Tax Publishers

Income Tax--Salary

SBI Rate as Benchmark for Determining Value ofPerquisite by Way of Interest Free or Concessional Loan Whether Unconstitutional--Recent Supreme Court Verdict

CA. Nisha Bhandari

Recently an issue arose before the Supreme Court in All India Bank Officers' Confederation v. Regional Manager, Central Bank of India 2024 TaxPub (DT) 2395 (SC) as to whether rule 3(7)(i) is arbitrary and violative of Article 14 of the Constitution in so far as it treats the PLR of SBI as the benchmark for determining value of perquisite by way of interest free or concessional loan. The present write-up discusses the ruling of the Supreme Court in this regard.

1. Value of perquisite by way interest free loan or concessional loan

Perquisite is defined under section 17(2) of the Income Tax Act, in an inclusive manner for the purposes of sections 15, 16 and section 17 itself. Section 17(2)(i) to (vii)/(viia) provides for certain specific categories of perquisites.