I-T Dept revises rules for valuing rent-free accommodation given by employers
The Income Tax Department has revised norms for valuing such accommodations
Representative Image (Reuters)
NEW DELHI: Employees having high grade salaries and also rent-free accommodation given by their employers, will be able to save more tax and take home a higher salary, as per amendments notified by the Central Board of Direct Taxes (CBDT) in income tax rules.
These shall come in effect from September 1, 2023.
The Income Tax Department has revised norms for valuing such accommodations, which will lead to more tax saving by the above-mentioned category of employees, thus resulting in greater take home salary.
As per the notification, where unfurnished accommodation is provided to employees other than the central or state government employees and such accommodation is owned by the employer then the valuation shall be: (i) 10 per cent of salary (reduced from 15 per cent) in cities having population exceeding 40 lakh as per 2011 census (earlier, 25 lakh as per 2001 census), (ii) 7.5 per cent of salary (reduced from 10 per cent) in cities having population exceeding 15 lakh but not exceeding 40 lakh as per 2011 census (earlier, 10 lakhs but not exceeding 25 lakhs as per 2001 census).