New Delhi: Employees, who avail rent-free or concessional accommodation provided by employers, can now save more money as the income tax department has revised norms for valuing this perquisite.
The rules will come into effect from September 1, according to a government modification.
Earlier, the Finance Act 2023 had brought in an amendment for the purposes of calculation of 'perquisite' with regard to the value of rent-free or concessional accommodation provided to an employee by his own employer. The rules for calculating perquisites have been notified now.
The rule has also been further rationalised so as to compute a fair tax implication of the same accommodation being occupied by an employee for more than one previous year.
The Central Board of Direct Taxes (CBDT) on Saturday has notified amendments to the income tax rules for valuing perquisites of rent-free or concessional accommodation by employers to employees. "The categorisation and the limits of cities and population have now been based on the 2011 census as against the 2001 census earlier," the CBDT said in a statement.
As per the notification, where unfurnished accommodation is provided to private sector employees and such accommodation is owned by the employer, then the revised limits of population are more than 40 lakh (in place of 25 lakh), between 15 lakh to 40 lakh (in place of 10 lakh), and lastly less than 15 lakh (earlier less than 10 lakh). However, the earlier perquisite rates of 15 per cent, 10 per cent and 7.5 per cent of the salary have now been reduced to 10 per cent, 7.5 per cent and 5 per cent of the salary respectively in the amended norm.
