Notification No. 08

What it does

By the Income-tax (First Amendment) Rules, 2004, made under sub-section (1) of section 295 read with clause (vi) of sub-section (2) of section 17 of the Income-tax Act, 1961, the Central Board of Direct Taxes amends rule 3 of the Income-tax Rules, 1962. In sub-rule (7), in clause (i), the portion beginning with the words "concessional loan made available" and ending with the words and figures "rate of 13% per annum for other loans" is substituted. In its place the perquisite in respect of a concessional loan for any purpose made available to the employee or any member of his household during the relevant previous year by the employer or by any person on his behalf is to be determined as the sum equal to interest computed at the rate charged per annum by the State Bank of India, constituted under the State Bank of India Act, 1955, as on the first day of the relevant previous year in respect of loans for the same purpose advanced by it.

Who it reaches

employees receiving interest-free or concessional loans from their employers
members of the household of such employees who receive the loan
employers valuing perquisites while deducting tax from salary under section 192
assessing officers checking the valuation of the loan perquisite

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.17	s.16, s.17, s.18
s.295	s.533

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

Notification No : 8

Section(s) Referred :

Date of Issue : 12/1/2004

Notification No. 8 of 2004, dt. 12th Jan., 2004

In exercise of powers conferred by Sub-section (1) of Section 295 read with clause (vi) of Sub-section (2) of Section 17 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely;-

1. (1) These rules maybe called the Income-tax (First Amendment) Rules, 2004.

(2) They shall come into force on the 1st day of April, 2004.

2. In the Income-tax Rules, 1962, in Rule 3, in Sub-rule (7), in clause (i), for the portion beginning with the words "concessional loan made available" and ending with the words and figures "rate of 13% per annum for other loans", the words, figures, brackets and letters "concessional loan for any purpose made available to the employee or any member of his household during the relevant previous year by the employer or any person on his behalf shall be determined as the sum equal to the interest computed at the rate charged per annum by the State Bank of India, constituted under the State Bank of India Act, 1955 (23 of 1955), as on the 1st day of the relevant previous year in respect of loans for the same purpose advanced by it", shall be substituted.

F.N0.142/4/2004-TPL

What it changes

The rule numbers are the 1962 Rules’ own, as the notification names them. The right-hand column is the department’s own mapping into the Income-tax Rules, 2026, which renumbered nearly everything.

Rule of the 1962 Rules	Now, in the 2026 Rules
Rule 3	rule 15

From when

1 April 2004.

What to watch

The rules come into force on 1 April 2004.
The valuation shifts from fixed percentages named in the rule to the State Bank of India's own rate, so the figure now changes from year to year and must be looked up rather than read off the rule.
The rate to be applied is the rate for loans for the same purpose, taken as on the first day of the relevant previous year, so both the purpose of the loan and that single date govern the working.
The clause reaches a loan for any purpose and a loan to any member of the employee's household, not merely a loan to the employee himself.

Where you meet it

In the perquisite value shown in Form No. 16 and in the salary computation in the return of income.

An example

Ours, not the Board’s: a worked case built from the rule the instrument sets, to show how it falls out.

For a housing loan outstanding during the previous year 2004-05, the perquisite is computed at the rate the State Bank of India charged on 1 April 2004 for housing loans. If a different loan to the same employee is a car loan, the rate for car loans as on that same date applies to it, and the two are worked out separately.

What it names

Rules it names. Rule 3 of the Income-tax Rules, 1962. The 1962 Rules were replaced by the Income-tax Rules, 2026, which renumbered nearly everything: a rule number quoted here almost never means the same rule today.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Notification No. 133/2025 [F. No. 370142/27/2025-TPL] / G.S.R 555(E) — Ministry of Finance 18 August 2025
Circular No. 3/2025 — Income tax deduction from salaries during the financial year 2024 25 under section 192 of the income tax act 1961 20 February 2025
Circular No. 24/2022 — Government of INDIA 7 December 2022
Notification No. 90/2022 [F. No. 370142/31/2022-TPL (Part-2)] / SO 3703(E) — Ministry of Finance 5 August 2022
Circular No. 4/2022 — Government of INDiA 15 March 2022
Notification No. 11/2021 [F. No. 370142/52/2020-TPL] / GSR 155(E) — Ministry of Finance 5 March 2021

← Notification No. 09 · Notification No. 07 →

What a notification is. A notification is made under a power the Act itself gives, and within that power it is law — unlike a circular, which only binds the department. Its reach is the reach of the enabling provision and no wider, and the date it carries decides from when it works.

Source: the Income Tax Department’s own published text — its page for this instrument.

What this is