Rent-Free Accommodation: The Income Tax Department has changed the rules for valuing rent-free homes given to employees by the company.
Rent-Free Accommodation: The Income Tax Department has made a big announcement for employed people. The IT department has changed the rules related to Rent-Free Accommodation. The Income Tax Department has changed the rules for valuing rent-free homes given to employees by the company. With this, the employees getting better salary and living in rent-free home provided by the employer company will now be able to save more and they will be able to take more cash as salary.
The rule will be applicable from September 1
The Central Board of Direct Taxes (CBDT) has amended the income tax rules. These rules will become effective from September 1. According to the notification, where only a home (unfurnished) is provided to employees other than Central or State Government employees and such home is owned by the employer, the valuation will be – Cities with population more than 40 lakh as per 2011 census 10% of salary (less than 15%). Earlier this rule was for population more than 25 lakh as per 2001 census.
These employees will benefit
AKM Global Tax Partner Amit Maheshwari said that employees who are getting adequate salary and taking home from the employer will be able to save more as their taxable base is now going to reduce with the revised rates.
AMRG & Associates Chief Executive Officer (CEO) Gaurav Mohan said these provisions incorporate the 2011 census data and are aimed at rationalizing the perquisite value calculation. Mohan said, there will be a reduction in the taxable salary of workers availing the benefit of rent-free home, which will increase the net take home salary.
