Yes, it is taxable as a perquisite under the Income Tax Act. As per Section 17(2)(ii) of the Income Tax Act, if your employer provides you a house at a rent lower than the market value, the difference is considered a taxable benefit (perquisite). The perquisite value is calculated as per Rule 3(1likRead more
Yes, it is taxable as a perquisite under the Income Tax Act.
As per Section 17(2)(ii) of the Income Tax Act, if your employer provides you a house at a rent lower than the market value, the difference is considered a taxable benefit (perquisite).
The perquisite value is calculated as per Rule 3(1like this:
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If employer owns the house:
15% of your salary (in metro cities) or 10% or 7.5% in other cities (based on population) Less Rent actually paid by you = Taxable perquisite amount
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If employer has rented the house:
Lower of actual rent paid by employer OR above % of salary Less Rent paid by you = Taxable perquisite
👉 This amount is added to your salary income and taxed as per your slab.
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As per Section 17(2)(ii) read with Rule 3(1) of the Income Tax Rules, 1962, if an employer provides a rent-free house, the value of the perquisite is calculated as: Step 1: Calculate Unfurnished Accommodation Value If employer owns the house: 15% of salary (metro city) 10% of salary (cities with 10–Read more
As per Section 17(2)(ii) read with Rule 3(1) of the Income Tax Rules, 1962, if an employer provides a rent-free house, the value of the perquisite is calculated as:
Step 1: Calculate Unfurnished Accommodation Value
If employer owns the house:
15% of salary (metro city)
10% of salary (cities with 10–25 lakh population)
7.5% of salary (other towns)
If house is on lease/rent:
Lower of actual rent paid by employer or above % of salary
Here, “salary” includes:
Step 2: Add Furniture Value (For Furnished Accommodation)
If the house is furnished, then the perquisite value is increased by:
🪑 Furniture includes – TV, fridge, sofa, washing machine, air conditioner, etc.
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