A company, instead of paying house rent allowance to the employee, pays rent directly to the land lord of the house in which the employee is residing. Now should this amount is to be included for the purpose of calculating ESI?
In the accounts of the company, it is shown as 'rent' under administrative expenses instead of employee benefits expense.
Rent is paid to house owner not to employee i.e its not the income of employee and should not be clubbed in the income of employee, hence esic liability should not exist on account of rent paid to house owner.
S.B.G. & CO. CHARTERED ACCOUNTANTS
New Delhi
CA Inter
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AJAY SINGH AND CO LLP
Thane
CA Final
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CCI
Pro
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