New Income Tax notification: Salaried employees living in rent-free accommodation to save more now

financialexpress.com:

The Income Tax Department has notified rules for valuing rent-free accommodation provided by employers. The notification will help employees who are drawing substantial salaries and living in rent-free accommodation provided by their employers to save more.

As the tax department has revised norms for valuing such houses, such salaried ITR filers will be able to get a higher take-home salary, according to experts.

The new amendments to the Income Tax rules notified by the Central Board of Direct Taxes (CBDT) will come into effect from September 1.

According to the notification, the valuation of the unfurnished accommodation owned by the employer but provided to salaried employees other than the central or state government employees will be as follows:

In a report, News agency PTI quoted AKM Global Tax Partner Amit Maheshwari as saying that employees who are drawing substantial salaries and receiving accommodation from the employer will be able to save more since their taxable base is going to be reduced now with the revised rates. “The perquisite value shall be lower resulting in relief to them in the form of take-home pay.”

According to AMRG & Associates CEO Gaurav Mohan, quoted in the report, these provisions incorporate the insights from 2011 census data and aim to rationalise the perquisite value calculation.

“Employees enjoying rent-free accommodation would see a rationalisation of perquisite value leading to a reduction in taxable salary, increasing the net take-home pay. It is worth noting that the reduction in the perquisite value of rent-free accommodations will yield dual implications: on the one hand, it will generate tangible savings for employees, while on the other hand, it will result in a corresponding