SBI Lending Rates for Loan Perquisite Calculation – 2015-16

State Bank of India (SBI) has published the reference lending rates for the purpose of loan perquisite calculation for the financial year 2015-16. You can find the SBI rates as on 01-Apr-2015 here.

SBI’s loan product called “Xpress Credit” corresponds to personal loans provided by employers to their employees. There are 3 categories of reference rates under this loan – Full Check-off, Partial Check-off, and No Check-off. The term Check-off, in this context, refers to the system whereby the employer regularly deducts a portion of an employee’s salary and makes payments towards loan repayment. If the loan repayment from an employee happens entirely by way of salary deduction (and not by the employee paying by cheque/cash outside of salary deduction), the Full Check-off rates should be considered for perquisite calculation.

For 2015-16, SBI has published a range of rates for the 3 categories (Full, Partial, and No Check-off). It is not clear how employers should interpret the range provided. For example, the reference rate range for the “Full Check-off” category is as follows:

Full Check-off: 300 bps – 350 bps above Base Rate i.e., 13.00 % p.a. – 13.50% p.a.

If an employer provides a personal loan at 0% interest rate and the loan deduction happens entirely by way of deduction from salary, should the employer consider 13% or 13.5% as the reference rate? It would be useful if the Income Tax Department provides a clarification on how employers should interpret the range of reference loan rates published by SBI.

You can read about how to calculate perquisite value on loan provided to employees in this blog post.

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Leave a Comment (21) ↓


  1. rakesh July 20, 2015


    Can u pls clarify the rules for leave encashment in case of inter company transfer.
    Is the leave available will be carried forward to new company or has to be settled in the existing company.

    • gautham July 21, 2015

      Statutes such as the Factories Act and the Shops and Establishment Act talk about leave encashment. However, these statutes seem to be silent on inter company transfers. Hence, we suggest that the leave encashment be settled in the first company before an employee moves to the second company.

  2. Rakesh September 11, 2015


    What is the rate now to be considered for calculating interest free loan perk.

    • gautham September 11, 2015

      Depends on the nature of the loan (car loan etc.). SBI provides reference rates for different loan categories. If the nature of the loan is not specified, it may be construed as a personal loan and the corresponding reference rate can be used.

  3. Rakesh September 14, 2015


    what is the rate applicable for personal loan. I am not able to find the same anywhere and in sbi site its too confusing. Can u pls share

    • gautham September 15, 2015

      The reference rate for personal loan, if the loan deduction is done as part of payroll: 13%

  4. Rakesh September 16, 2015

    Thanks but just now checked in Taxmann Ready Reckoner its says 18.5%. for current financial year. is there any difference between the two as per SBI chart and Taxmann RR.

    • gautham September 16, 2015

      Yes, there is a difference between rates given by SBI and Taxmann. Unfortunately, the Income Tax Department has not given any clarification in this regard.

  5. Rakesh September 16, 2015

    So, which one to follow.

    • gautham September 17, 2015

      There is no clarity on this. Some organizations follow the SBI published rates (since SBI is the nodal agency for this as per the Income Tax Act) and other organizations follow the Taxmann rates.

  6. krunal mehta September 24, 2015


    The xpress credit loan is the loan which is provided by SBI to employees who are maintaining salary account in SBI and that is also preferred employer by SBI.

    On other hand SBI Saral loan is pure personal loan.

    In view of above bifurcation, one cant consider xpress credit loan rates for perquisite valuation but they should consider rate for personal loan.

    • gautham September 24, 2015

      SBI publishes a specific web page which provides the reference rates for the purpose of loan perquisite calculation. On that page, there is no reference to SBI saral loan rate. The page contains rates only for Xpress credit which is a personal loan product. In fact, there is no other reference rate for personal loans on the page published by SBI.

      If Xpress credit rates are not to be used for the purpose of perquisite calculation, SBI would not have included it on the page. Xpress credit in this case can be looked at as the relevant proxy for personal loan.

  7. Santosh November 18, 2015

    Could you please clarify what is the difference between Full check off & No check off.

    • gautham November 19, 2015

      Check-off refers to the arrangement an employer has with a bank for recovering loan interest and principal from employees. Many banks get into an arrangement with organizations and provide loans to employees of organizations. In case of full check-off, the organization deducts the loan installment in full from its employees’ salary and remits the same to the bank (loan provider). In case of no check-off, there is no deduction from employees’ salary and employees have to remit the loan installment to the bank themselves.

  8. Rakesh January 21, 2016

    what to consider, as per taxman or sbi website

    • gautham January 25, 2016

      Please note that Taxmann goes by the rates published by SBI. Let me explain where the confusion arises from.

      SBI offers several loan products (Xpress Credit, SBI Pension Loans, SBI Saral, etc.) under the “Personal Loans” segment. For the purpose of perquisite calculation, Taxmann states SBI Saral’s rate as of 01-Apr as the reference rate. However, SBI’s own website on its webpage which presents interest rates “For the purpose of computing perquisite valuation” uses the rates of Xpress Credit as the reference rate for perquisite valuation. In fact, there is no mention of the SBI Saral rate in the list of interest rates published (on SBI’s website) for the purpose of perquisite valuation.

      We would like to go by the rates published on the SBI website given that SBI is the source of the reference rates as per the Income Tax Act. It would be good if the Income Tax Department’s website publishes SBI’s reference rates on its site to avoid this confusion.

  9. Hanphuba May 7, 2016

    Hi, sir….

    What is the interest rates of personal loan for DSP ( Defence Salary Package ) account holders.

  10. Kamal kishore jha March 7, 2018

    I am state government employee. My salary account is in SBI.I want to take express credit personal loan from SBI.can I avail full check off interest rate facility?

  11. Satyanarayan August 18, 2019

    What is the mean of no check off

    • gautham August 30, 2019

      No auto deduction of loan repayment.


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