The Central Board of Direct Taxes (CBDT) is likely to review the erstwhile Rule 3 of the Income Tax rule and will soon come out with a fresh list of perquisites that will be taxable, after Budget 2009-10 abolished the fringe benefit tax. “A list (of perquisites) will be published by the CBDT,” revenue secretary PV Bhide said.

Rule 3 of the IT rule was scrapped when FBT was introduced in Budget 2005-06. The rule listed out norms for valuation of perquisites that were taxable. These included perquisites such as accommodation, cars, personal servants, household amenities, education of wards and free or concessional journeys as well as interest free or concessional loans, holiday expenses and use and transfer of assets.

The finance minister Pranab Mukherjee in the Budget on Monday has proposed abolishing FBT and reverting to the earlier system, perquisites will be taxed at the hand of employees.

As per the proposal, perquisites will be defined by the CBDT. The Budget document however spelled out that employee stock options (Esops) will continue to be taxed as perquisites. The tax liability would be the difference between its fair market value on the day it is vested and exercised.