Perquisite on an Interest-Free / Concessional Loan
The taxable perquisite when your employer lends below the SBI benchmark rate — worked out month by month (section 17(2) / Rule 3(7)(i)).
Switch calculator — current: Concessional / interest-free loan
Your details
Loans ≤ ₹20,000 in aggregate and medical-treatment loans are exempt.
| Month | Max. monthly outstanding | Monthly interest | Interest recovered from employee | Taxable perquisite |
|---|---|---|---|---|
| April | 0 | 0 | ||
| May | 0 | 0 | ||
| June | 0 | 0 | ||
| July | 0 | 0 | ||
| August | 0 | 0 | ||
| September | 0 | 0 | ||
| October | 0 | 0 | ||
| November | 0 | 0 | ||
| December | 0 | 0 | ||
| January | 0 | 0 | ||
| February | 0 | 0 | ||
| March | 0 | 0 |
Monthly interest uses the SBI rate; a blank “interest recovered” cell falls back to the rate charged above.
Your answer
₹ —
Still needed: at least one month’s outstanding balance.
- The figure, and how it compares where there is a choice
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For guidance only — not tax advice. Every figure is drawn from BharatX’s verified rule book, with the sections and rules shown alongside it.
Concessional / interest-free loan: how it works and FAQs
FY 2025-26 (Income-tax Act 1961) and FY 2026-27 (Income-tax Act 2025) · Updated
How it works
If your employer lends you money interest-free or below the SBI benchmark rate, the interest you saved is a taxable perquisite.
If your employer lends you money interest-free or below the SBI benchmark rate, the interest you saved is a taxable perquisite. It is worked out month by month on the maximum outstanding balance each month: SBI-rate interest minus the interest you were actually charged. Small loans (≤ ₹20,000 in aggregate) and medical-treatment loans are exempt.
- For each month, take the maximum outstanding balance.
- SBI interest = balance × SBI rate ÷ 12; charged interest = balance × charged rate ÷ 12.
- Perquisite for the month = max(SBI interest − charged interest, 0).
- Add up the twelve months. Exempt loan types give nil.
Worked example
Perquisite for April = ₹3,750 (summed across all months for the year).
SBI 8.5% p.a., charged 4% p.a., April maximum outstanding ₹10,00,000.
- SBI interest = round(10,00,000 × 8.5% ÷ 12) = ₹7,083.
- Charged interest = round(10,00,000 × 4% ÷ 12) = ₹3,333.
Perquisite for April = ₹3,750 (summed across all months for the year).
Frequently asked questions
Which loans are exempt?
Loans not exceeding ₹20,000 in aggregate, and loans taken for the medical treatment of specified diseases. Choose the exempt loan type for these.
Which interest rate is used?
The State Bank of India benchmark lending rate as on the first day of the financial year, applied to the maximum outstanding balance each month.
Every figure the calculator shows lists the sections it relies on under “Legal basis”. For guidance only — not tax advice.