In the Old Tax Regime, perquisites (often called “perks”) are non-cash benefits provided by your employer. While most perks are taxable, the Income Tax Act provides specific exemptions for several categories to reduce your taxable salary.
Here is a breakdown of the key perquisites that are exempt under the old scheme as of 2026.
🏢 Daily & Work-Related Exemptions
These are common benefits provided for the smooth discharge of your professional duties.
- Laptops and Computers: Use of a laptop or computer owned by the employer (for both official and personal use) is fully exempt.
- Mobile and Telephone: Reimbursement of expenses for a telephone or mobile phone used at your residence is fully exempt.
- Refreshments: Free tea, coffee, or snacks provided during working hours in the office are fully exempt.
- Office Meals: Free food and non-alcoholic beverages provided during working hours are exempt up to ₹50 per meal.
Note: Meals provided in remote areas or offshore installations are fully exempt.
🏥 Medical & Insurance Benefits
The government offers several exemptions to help cover health-related costs for you and your family.
- Medical Treatment in Employer’s Hospital: Fully exempt if the treatment is in a hospital maintained by the employer.
- Government/Notified Hospitals: Medical treatment in government-run or “notified” hospitals is also fully exempt.
- Health Insurance Premiums: Any premium paid by your employer for your health insurance (Group or Individual) is fully exempt.
- Medical Reimbursement: General medical reimbursements for private treatment are exempt up to ₹15,000 per year.
- Overseas Medical Treatment: Under the Finance Act 2025, the exemption limit for medical treatment abroad has been enhanced to ₹8,00,000 (previously ₹2,00,000).
🚗 Travel and Transport
- Conveyance for Official Use: Any allowance or facility for a car/vehicle used strictly for official duties is not taxable.
- Leave Travel Concession (LTC): Exempt for travel within India twice in a block of four years (subject to actual economy airfare or AC first-class rail fare).
- Transport Allowance (Specially-Abled): For blind or orthopedically handicapped employees, transport allowance is exempt up to ₹3,200 per month.
🎓 Education and Other Perks
- Scholarships: Educational scholarships granted to employees or their children are fully exempt.
- Free Education (Employer-Owned): If the employer owns an educational institution, it is exempt up to ₹1,000 per month per child.
- Interest-Free/Concessional Loans: Loans provided by the employer are not taxable if the total loan amount does not exceed ₹20,000 (or if the loan is for certain specified “critical” diseases).
- Gifts: Gifts in kind (vouchers/tokens) are exempt up to ₹5,000 per year.