Calculating Taxable Accommodation Perk for Employee with Personal Lease

Vivian Victor (5 Points)

21 March 2023  

How should the Accommodation Perk be calculated for taxation purposes for an employee who has a personal leased accommodation with a rent of Rs. 10,000 per month, an eligibility for rent reimbursement from their non-government employer of Rs. 8,000, and bears the remaining Rs. 2,000 themselves?

The employee's annual salary is Rs. 12 lacs.

According to Income Tax Rules on the Value of Perquisites, the value of the accommodation perk for an accommodation taken on lease or rent by the employer is the actual amount of lease rental paid or payable by the employer or 15% of the salary, whichever is lower, as reduced by the rent, if any, actually paid by the employee.

Please provide guidance on calculating the accommodation perk for taxation purposes.