New Delhi: The income tax administration has altered criteria for valuing such residences, allowing employees to save more and receive a greater take-home salary if their employers give them with rent-free housing.
Changes to the Income Tax Rules were announced by the Central Board of Direct Taxes (CBDT) and will take effect on September 1.
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).—Inputs from Agencies
