RFA Mystery

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SWAPNIL MEERA SHARMA (Querist)
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15 August 2010 Sir/Madam,

I'm doing the chapter of Salary under Income Tax Act.

While reading the provisions of HOTEL ACCOMMODATION I came to know that if hotel is provided by employer while the transfer of employee to another city then tax will be paid by employee on it if provided for more than 15 days.

My question to experts::-

1. What if transfer is WITHIN THE CITY.....???[not from one city to another].

I mean, for example, mumbai is a big city where it is possible that transfer is being made to other office of employer which is in mumbai too.

2. What if hotel is provided to employee even if there's NO TRANSFER of employee...???

3. What if hotel is provided to the employee in other city without any transfer of the employee in that city...???
[As I read that perks are taxable even if provided to employee's relatives....so it is possible that the employer provided a hotel to employee's relative in other city which is eventually taxable as perk in employee's hands].

4. If hotel is provided for more than 15 days then how much will be taxable....Is it for period above 15 days only
or all days(including first 15 days)....???

May I have your views on it.
Please explain elaborately.
Thanks.

Pankaj K Gupta

Pankaj K Gupta (Expert)
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17 August 2010 Hi,
1.Income Tax laws only talks about transfer, not cities, hence even local transfers are covered to claim the exemption.
2. If Hotel is provided when there is no transfer involved, it is provision of rent free accomodation and need to be valued accordingly for Boarding and lodging purposes seperately.
3. If Hotel is provided without Transfer, it is more like taxability of Perks, not otherwise mentioned specifically and hence shall be taxable in the Employee's hands at Cost to Employer's Basis.
4.Only excess days over 15 Days shall be taxable.
Thanks, Pankaj

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