TAX TREATMENT OF ACCOMMODATION PROVIDE BY THE EMPLOYER FACILITY, WITH VALUE OF PERQUISITE CALCULATOR (ACCOMODATION)

With booming salary packages, Indian corporate have also started proving accommodation facility to their top level executives. It is a perquisites as per Income Tax Act, 1961. Let us understand the tax of it.
  1. Relevant terms:
 a. Accommodation includes flat, farm house or part thereof or accommodation in a hotel , motel , service apartment ,guest house, caravan ,mobile home ,  ship or other floating structure .
b. Hotel includes licensed accommodation  in the nature of motel , service apartment  or guest house. Accommodation provided in a hotel will not be a taxable  perquisite if –
  • The period of such accommodation does not exceeds 15 days, and
  • Such accommodation has been provided on the transfer of the employee from one place to another.
  1. Value of unfurnished accommodation provided by the government :
As per explanation 1 to sec.17 (2), value of taxable unfurnished  accommodation provided by the central or state government shall be as computed under-
3. Value of unfurnished accommodation provided by employer other than govt: as per explanation to sec. 17 (2)
a. Owned by the Emloyer
 
Place of accommodation
cities  having population exceeding 25 lakhs as per latest census
cities having population  10 lakhs but not exceeding 25 lakhs as per latest census
other  places
Gross Amount
15% of the salary
10% of the Salary
7.5% of the salary
Less:Recovery
Rent recovered from the exmployee
Rent recovered from the exmployee
Rent recovered from the exmployee
Net Value
b.Not owned by the employer-taken on lease by employer
Rent paid by the employer or 15% of the salary
whichever is lower
Less: rent recovered from employee
 
c. Accommodation in hotel
 
24% of salary or actual charges
whichever is lower
Less : amount paid or payable by the employee
 
 
4. Value of furnished accomodation
 Particular
Rs.
Value of unfurnished accommodation  as above
Add : value of furniture
If owned by employer then 10% p.a. of original cost of such furniture
If hired from third party then actual hire charges
xxx
Less:  any  charges  paid or payable  by the employee
XXX
Value of furnished  accommodation
XXX
 

Download Value of Perquisite calculatorU/s 72(2) only Accomodation.

Value of Perquisite (Accommodation)

When the accommodation is provided  by the central government or any state government to an employee who is serving on deputation with any body or undertaking  under the control of such government –
 
a. The employer of such an employee shall be deemed to be that body or undertaking where the employee is serving on deputation , and
 
b. Value of perquisite of such an accommodation shall be the amount calculated as similar with accommodation is   owned by the employer.
 
 
8. Fully exempt cases : exempted employees not liable to tax for accommodation provided by employer are-
 
a. Free accommodation facility ( in the form of official residence) given to supreme / high court judge
 
b. Free furnished residence given to a parliament official / union minister/ leader of opposition in parliament
 
c. Value of rent free official residence given to chairman / member  of union public service commission in service.
 
d. Accommodation in a remote area for an individual working in a mining or mineral exploration site.
 
e. Accommodation in a hotel for a period upto 15 days for an employee on his transfer.

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