INCOME TAX · SALARY AND EMPLOYEES
Perquisites and Allowances: Which Salary Benefits Are Taxable?
Learn how salary allowances, reimbursements and employer benefits differ, and what to check before treating a benefit as exempt.
By Vyapar Setu Online | Salary and employees · 26 October 2026
Income Tax learning series · Salary and employees · Article 9 of 27
A salary package can contain basic pay, allowances, reimbursements, a company car and other benefits. The label on the payslip is only the beginning; tax treatment depends on the purpose, evidence and prescribed rules.
Year guide: Numerical limits, examples and familiar section numbers in this article refer to FY 2025–26 / AY 2026–27 under the Income-tax Act, 1961, unless stated otherwise. Income from 1 April 2026 belongs to Tax Year 2026–27 under the Income-tax Act, 2025, with corresponding provisions and numbering. Check the year before applying a rule. Official transition guidance.
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For learning and preparation. Verify the rules and official guidance for your period and circumstances before making a filing or tax decision.
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