## Free or Concessional Tickets [Rule 3(6)]

### When it applies

Where an employer engaged in the carriage of passengers or goods (e.g. transport companies) provides free or concessional tickets to an employee for personal journeys, it is a taxable benefit.

### Valuation

> Value = Fare offered to the public − any amount paid by the employee.

### Important exception

No perquisite arises for employees of airlines or railways — their free/concessional passes are not taxable.

Worked example

### Example 1

Transport company employee: A bus company gives an employee free tickets for personal travel worth ₹8,000 (public fare); employee pays ₹2,000.

Perquisite = ₹8,000 − ₹2,000 = ₹6,000.

### Example 2

Railway employee: A railway employee receives a free travel pass for a personal journey worth ₹5,000.

Perquisite = Nil (specific exception for railway/airline employees).

⚠️ Common exam mistakes

Taxing airline/railway employees on their passes — they are specifically exempt.
Valuing at the employer's cost instead of the fare offered to the public.

Reference: Rule 3(6) — Income-tax Rules, 1962

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