Mr. Sharma gets salary of Rs.40,000 p.m. and is provided with rent free unfurnished accommodation at Ludhiana ( population 20 lakhs) whose fair rental value is Rs.15,000 p.m. He gets leave encashment for the current previous year of RS.20, 000 during the year. His salary is due on 1st day of every month. Calculate the value of rent free accommodation and gross salary
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Mr. Sharma gets salary of Rs.40,000 p.m. and is provided with rent free unfurnished accommodation at
Replies (2)
Hii Aastha. It depends on whether that accomodation is owned by Employer or Hired by Employer. And try to give details like Basic Salary, Dearness Allowance, Bonus if any, Allowances etc..
If the accomodation is owned by employer then value of rent free accommodation will be
Rent paid
Less: 10% of salary (as population is 20 lakhs)
Or if accomodation is taken on lease by employer then value of rent free accommodation will be
Rent paid by employer
15% of salary
whichever is lower
Rent paid
Less: 10% of salary (as population is 20 lakhs)
Or if accomodation is taken on lease by employer then value of rent free accommodation will be
Rent paid by employer
15% of salary
whichever is lower
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