Being salaried in India means your taxes are largely sorted. No quarterly filings, no advance tax stress – just a payslip, a Form 130, and the confident assumption that someone smarter has already handled it. And to be fair, that assumption is mostly right. Mostly.
But here’s what often goes unnoticed: the same system that deducts your TDS also factors in things like your Diwali bonus, Amazon vouchers, and other gifts from your employer. And it doesn’t stop there. If you’ve taken a loan from your employer, there’s a separate tax benefit built in there too.
The problem is that most salaried employees have no idea either of these exists. And even when they do, they’re often not claiming them correctly. Which is why there’s an added reason to pay attention to – the Income-tax Rules, 2026 have made both provisions more generous from April 1, 2026.
To understand this, let’s start with employer-provided gifts.
What’s the tax exemption limit on employer gifts?
Until now, any gift received from your employer was tax-free only up to ₹5,000 in a year. Anything beyond that was fully taxable.
Under the new rules, this limit has been increased to ₹15,000.
More specifically, as per Rule 15(5)(a), Table IV, Sl. No. 4, the value of any gift, voucher, or token received from your employer — whether on festive occasions or otherwise, is not taxed as long as the total value across the year does not exceed ₹15,000. Once this threshold is crossed, the entire amount is added to your salary income and taxed at your slab rate.
So if you receive ₹16,000 worth of gifts during the year, the full ₹16,000 becomes taxable, not just the excess ₹1,000.
To see how this works when applied across a year, consider a few common scenarios:
| Scenario | Aggregate gifts received | Taxable amount |
|---|---|---|
| Diwali voucher only | ₹12,000 | Nil (under ₹15,000) |
| Diwali + birthday token | ₹15,000 | Nil (at the limit) |
| Diwali + two other occasions | ₹18,000 | ₹18,000 (full amount) |
As long as the total value stays within ₹15,000, the benefit remains fully tax-free, but once it is exceeded, even marginally, the entire amount becomes taxable.
Now, let’s look at how employer-provided loans are treated.
What counts as an employer loan?
When your employer gives you an interest-free or concessional loan, the difference between the interest you actually pay and the rate charged by SBI for a similar loan is treated as a perquisite and added to your taxable salary.
Previously, this perquisite was waived only if the total loan amount stayed within ₹20,000 in aggregate – a threshold that was effectively too low to be useful for any meaningful borrowing.
This is where the Income-tax Rules, 2026 make a difference. They increase the threshold to ₹2,00,000. Source: Rule 15(5)(a), Table IV, Sl. No. 1(a)
As a result, two situations are now fully exempt from perquisite tax.
1. Loans for medical treatment
To begin with, if the loan is taken for the treatment of diseases listed under Rule 18 (which covers critical illnesses), the interest on the loan is fully exempt from perquisite tax, regardless of the loan amount. However, if any part of your medical expense is reimbursed by health insurance policy, that portion of the loan loses its interest-free tax status unless it is repaid to the employer immediately.
2. Loans up to ₹2,00,000
Beyond medical cases, there is a broader exemption that applies to most day-to-day needs.
If the loans from your employer are within ₹2,00,000, you won’t pay any perquisite tax. This limit is calculated on the aggregate outstanding balance across all such loans, not individually.
In practical terms, this is sufficient to cover most short-term requirements — whether it’s a medical bill, a vehicle down payment, or a home repair — all of which can now fall comfortably within the exempt range.
But once this threshold is crossed, the tax treatment changes.
How is perquisite calculated on loans above ₹2 lakh?
For loans that exceed ₹2,00,000 and are not for specified medical treatment, the perquisite value is calculated using the SBI lending rate applied to the maximum outstanding balance each month.
As a result, the actual tax cost on a ₹3,00,000 loan is typically modest, since it’s calculated only on the outstanding balance.
For example, if you take a ₹3,00,000 loan at 0% interest, and the SBI rate is 8%. Even though you’re not paying interest, the tax department pretends you earned 8% on that money. This ‘imaginary’ interest (called notional interest) is added to your salary for tax purposes.
Frequently asked questions
1.How does my employer report these perquisites?
Your employer calculates the perquisite value and includes it in your Form 130. The TDS deducted from your salary already accounts for this, so you don’t need to do anything separately unless you’re filing a revised return.
2.What if I repay my employer loan mid-year?
The perquisite is calculated based on your outstanding loan balance each month. If you repay the loan and bring it below ₹2,00,000, no perquisite tax applies for those months.
3.Can I claim exemption on both medical loans and the ₹2 lakh general limit?
Yes, but they work differently. Medical loans for Rule 18 diseases are fully exempt regardless of amount. The ₹2 lakh exemption applies separately to other loans. If you have both, they’re evaluated independently.
If you have questions about how your employer handles perquisite valuation — or whether a specific benefit qualifies? Drop them below.