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CBDT notifies rules for valuing rent-free accommodation perquisite provided by employers, ETHRWorld


hr.economictimes.indiatimes.com | www.ETHRWorld.com

<p>Notably, this amendment brings forth beneficial consequences for employees receiving significant salaries and employer-provided accommodations.</p>
Notably, this amendment brings forth beneficial consequences for employees receiving significant salaries and employer-provided accommodations.

In a move that will positively impact employees with substantial salaries and employer-provided rent-free housing, the income tax department has announced revisions to the valuation norms for such accommodations. According to a PTI report, the new changes will come into effect from September 1, and will likely increase take-home salaries for eligible employees.

The Central Board of Direct Taxes (CBDT) has notified the amendments to the Income Tax Rules, bringing about these changes. The modifications concern the valuation of unfurnished accommodations that are owned by employers and offered to employees outside the central or state government sector.

According to the revised notification, the valuation for such accommodations will be as follows:

  • In cities with a population exceeding 40 lakh according to the 2011 census, the valuation will be 10% of the salary, reduced from the earlier 15%.
  • In cities with a population exceeding 15 lakh but not surpassing 40 lakh as per the 2011 census, the valuation will be 7.5% of the salary, down from the previous 10%.

Notably, this amendment brings forth beneficial consequences for employees receiving significant salaries and employer-provided accommodations. In the PTI report, Amit Maheshwari, Tax Partner at AKM Global, highlighted the reduction in…


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