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In August 2025, the CBDT issued Notification No. 133/2025,
introducing the Income Tax (22nd Amendment) Rules, 2025. The
amendment inserted Rule 3C and Rule 3D, substantially enhancing the
exemption limits for perquisites (non-monetary benefits) under
Section 17 of the Income-tax Act, 1961. The changes take effect
from April 1, 2025.
The amendment takes effect on April 1, 2025.
| Provision | Old limit | New limit |
|---|---|---|
| Rule 3C - Salary threshold for perquisites | INR 50,000 | INR 4,00,000 |
| Rule 3D - Gross total income threshold for medical treatment abroad | INR 2,00,000 | INR 8,00,000 |
Rule 3C - Salary threshold of "specified employee" u/s 17(2)(iii)(c)
- Employees whose salary exceeds INR 4 lakh will be considered as "specified employee".
- Non-monetary perquisites such as company cars, domestic help, utilities, educational facilities, transport facility will remain tax-free for "specified employees" whose salary is less than INR 4 lakh.
- Benefits such as ESOPs, interest-free/concessional loans, gifts, food & beverages, club membership are not covered under this relief.
- This relaxation does not apply to company directors or employees who hold a substantial interest (i.e., over 20% of the voting rights).
Rule 3D - Gross income threshold for section 17(2)(vi)
- If the gross total income of an employee does not exceed INR 8 lakh, then expenses of medical treatment abroad, travel and stay for self, family or attendant will be exempt.
- This rule pertains to exemption for expenses incurred on overseas medical treatment
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