Employer-Provided Laptops, Mobiles & Gadgets: Are They Taxable Perquisites?
Almost every salaried employee at some point uses a company laptop, a work phone, or gets to keep an old company device after an upgrade. Whether any of this counts as taxable income depends on a distinction the tax rules draw sharply: are you simply using the asset, or has it actually been given to you?
The Key Distinction: Use vs Transfer of Ownership
Rule 3(7)(vii) of the Income Tax Rules deals with the value of any benefit arising from the use of movable assets, other than laptops and computers, by an employee or their household members, belonging to the employer. Separately, Rule 3(7)(viii) deals with the situation where the employer transfers ownership of a movable asset to the employee. The tax treatment of these two situations is very different.
Use of Employer-Owned Laptops and Computers: Fully Exempt
Use of Other Movable Assets (Not Laptops/Computers): 10% of Cost, Annually
For other movable assets owned by the employer and merely made available for the employee's use, such as furniture, appliances, or other equipment (not laptops or computers, which are exempt as above), the taxable perquisite value is computed as 10% per annum of the actual cost of the asset to the employer (or the hire charges, if the employer has taken it on rent), reduced by any amount recovered from the employee.
Transfer of Ownership: Taxable Based on Depreciated Value
When an employer actually transfers ownership of a movable asset to an employee, for example gifting an old laptop, mobile phone, or company car to the employee after a few years of use, this is treated as a taxable perquisite. The taxable value is the original cost of the asset to the employer, reduced by a notional depreciation for each completed year of use by the employer, minus any amount paid by the employee for the asset.
Depreciation Rates for Computing Perquisite Value on Transfer
| Asset Type | Depreciation Method & Rate |
|---|---|
| Computers and electronic items | 50% per year, on a reducing balance (written down value) basis |
| Motor cars | 20% per year, on a reducing balance (written down value) basis |
| Any other asset (furniture, appliances, etc.) | 10% per year, on a straight-line basis |
Worked Example: Company Laptop Given to Employee
Mobile Phones and SIM Reimbursements
Reimbursement of actual mobile phone and internet bills incurred for official purposes, supported by bills, is generally treated as a reimbursement of business expenditure and not a perquisite, provided the connection is in the employee's name but used substantially for work and the employer's policy treats it as a business expense reimbursement. Where an employer-owned phone is simply used by the employee (ownership not transferred), similar reasoning to the laptop exemption is often applied in practice for company-owned mobile devices used for work, though mobile phones are not as explicitly named in Rule 3(7)(vii) as laptops and computers are, so employers should apply this carefully.
Practical Takeaway for Employees
If you are simply using company-owned equipment, including laptops and computers, you generally have nothing to worry about from a perquisite tax perspective. The tax question arises specifically when ownership changes hands, typically when older equipment is gifted to employees during a refresh cycle, and at that point the depreciated value (not the original purchase price) becomes the taxable amount.
Frequently Asked Questions
Source and review trail
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- Primary category
- Income Tax
- Official starting point
- www.incometax.gov.in
Page source links
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Employer devices — use and transfer are different perquisite events
Decision table
| Situation | 2026 treatment / control | Why it matters |
|---|---|---|
| Company laptop used for work/personal use | Use of laptop/computer is specifically treated favourably under the valuation rule. | Ownership remains with employer. |
| Device transferred to employee | Compute prescribed depreciated value less amount recovered. | Transfer is not the same as use. |
| Mobile/telephone bill paid by employer | Apply the specific telephone/mobile rule and evidence. | Do not mix with cash allowance reimbursement. |
| Cash gadget allowance | Usually salary/cash allowance analysis, not employer-owned asset use. | Label does not determine exemption. |
Worked practical example
A ₹1 lakh company laptop is transferred after two completed years. The prescribed electronic-equipment depreciation framework is relevant to the transfer value; that is a different computation from the nil-value rule while the employer merely owns and provides the laptop.
Evidence checklist
- asset register
- original invoice
- date placed in use
- transfer/HR approval
- amount recovered from employee
Primary-source checks: Income Tax Department · Income-tax Act, 2025
Use this with the original article: this module tightens current-law, edge-case and evidence controls; it does not replace the article's existing explanation or your fact-specific professional review.
Primary sources & related provisions
Statutory provisions referenced in this guide: