The definition of perquisite is a __________ definition.

Correct option is B

The correct answer is (b) inclusive

Explanation:

• In the Income Tax Act, 1961, the definition of perquisite provided under Section 17(2) is considered an inclusive definition.

• An inclusive definition is one that uses the word "includes," allowing for the term to encompass both its ordinary meaning and specific items listed.

• It covers various benefits provided by an employer to an employee, such as rent-free accommodation, concessional interest on loans, or stock options.

• This structure allows the tax authorities to bring various forms of non-monetary benefits under the tax net.

• Because it is inclusive, the list is not exhaustive, and other similar benefits can be interpreted as perquisites.

Information Booster:

• Perquisites are taxed under the head "Salaries" in income tax filings.

• They can be categorized into those taxable for all employees, those taxable only for specified employees, and tax-free perquisites.

Additional Knowledge:

Descriptive (Option a)

• A descriptive definition provides a detailed account of the qualities of the term; perquisite law is statutory rather than purely descriptive.

Enumerative (Option c)

• An enumerative definition simply lists items without leaving room for broader interpretation; the IT Act's use of "includes" makes it broader than a simple enumeration.

Limited (Option d)

• A limited definition restricts the scope strictly to what is mentioned; the tax law is designed to be broad (inclusive) to prevent tax evasion.