## Other Fringe Benefits & Amenities [Rule 3(7)]

This rule covers a cluster of fringe benefits. Each has its own valuation and exemption.

### 2. Travel, Touring & Accommodation

Employer meeting holiday expenses (other than LTA) of an employee/family → taxable benefit.
If a facility is maintained by the employer and not available to all employees → value = the value such a facility is offered to the public by other agencies.
Official tour: expenses of a family member accompanying the employee are taxable. If an official tour extends into a holiday, only the extended stay expenses are taxed.

### 3. Food and Beverages (FNB)

Food and non-alcoholic beverages provided by the employer are generally taxable, with exemptions:

FNB during working hours, or through paid vouchers → exempt up to ₹50 per meal.
FNB at remote worksites / offshore installations → fully exempt.
The paid-voucher exemption is available only under the Optional tax regime.

### 4. Gifts and Vouchers

Gifts in kind or vouchers → exempt if aggregate value < ₹5,000 in the year (excess taxable).
Gift in cash is treated as an allowance and is fully taxable.

### 5. Credit Card Expenses

Employer bearing credit card expenses → entire expense taxable.
Expenses solely for official purposes → not taxable, provided adequate documentation is maintained.

### 6. Club Memberships

Club membership/annual fees borne by the employer are taxable, except:

Memberships exclusively for official purposes → not taxable.
Initial fee for corporate membership → not taxable in the employee's hands.
Use of health club / sports facilities provided uniformly to all employees → no perquisite.

### General rule

Any amount recovered from the employee is reduced from the perquisite value.

Worked example

### Example 1

FNB voucher (Optional regime): Employer provides meal vouchers worth ₹70 per meal for 250 working days.

Exempt = ₹50 × 250 = ₹12,500; Taxable = (₹70 − ₹50) × 250 = ₹5,000 (paid-voucher exemption only under Optional regime).

### Example 2

Gift in kind: Employer gives a gift voucher of ₹6,000 on the employee's marriage.

Since aggregate ≥ ₹5,000, the entire ₹6,000 is taxable (the ₹5,000 is a threshold, not a standard deduction).

### Example 3

Official tour with family: Employee goes on an official tour; employer pays ₹40,000 for the spouse who accompanies.

The ₹40,000 spouse expense is a taxable perquisite.

⚠️ Common exam mistakes

Treating the ₹5,000 gift limit as a deduction — once aggregate gifts in kind reach ₹5,000, the whole amount is taxable.
Taxing a cash gift under the ₹5,000 gift rule — cash gifts are fully taxable as allowance.
Claiming the FNB paid-voucher exemption under the Default regime — it is available only under the Optional regime.
Taxing the initial corporate club membership fee — it is exempt.
Forgetting that family expenses on an official tour are taxable.

Reference: Rule 3(7) — Income-tax Rules, 1962

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Other Fringe Benefits — Travel, Food, Gifts, Credit Card, Club [Rule 3(7)]

Worked example