Tax on guest house

This query is : Resolved

AMIT PAREKH (Querist)
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15 April 2013 My Company has taken a flat on rent. An Employee stays in the flat and he does not pay rent to company.Also the Australian client stays in it whenever he visits India. Can the company take a stand that since the flat is in nature of Guest house, it is not taxable for employee and also the company Explain tax consequenses for company as well as Employee

Thanks in advance

Amit Parekh

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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15 April 2013 Guest house arrangement for employees to stay and do official duties not taxable in the hands of employee, but if the employee staying permanently then need to calculate the perquisite

For company point of view need to deduct TDS on rent payment if it exceeds the threshold limit u/s.194I

AMIT PAREKH

AMIT PAREKH (Querist)
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16 April 2013 The employee is staying since last 10 months. So can we say it is permanent and thus calculate taxable perquisite in his hands. Such a perquisite will be taxable or not??

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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16 April 2013 If employer providing to employee accommodation exceeding 15 days, then need to calculate the taxable perquisite value and taxed in the hands of employee.

So your case is taxable in the hands of employee

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