Four Rule 3 perquisites that cut tax bills under India's New Tax Regime

Salaried employees in India who have opted for the New Tax Regime may be missing out on up to ₹1,20,000 in annual tax savings through four employer-provided benefits that remain exempt under Rule 3 of the Income Tax Rules 1962. Unlike Section 10 exemptions such as HRA and LTA, which were removed by the 2020 New Regime, Rule 3 perquisite valuations were left untouched and apply equally in both regimes. The four benefits are meal vouchers (capped at ₹26,400/year), employer gifts (capped at ₹5,000/year), telephone and internet bill reimbursements (no monetary cap), and a company car used for mixed purposes (fixed monthly taxable value regardless of actual cost). The key distinction in each case is the payment mechanism: reimbursements against actual bills or structured vouchers qualify, while cash allowances for the same purposes are fully taxable. Employees are advised to review their CTC structure and, where possible, ask HR to restructure cash allowances into qualifying reimbursement arrangements at no additional cost to the employer.