VALUE OF PERQUISITES - PERSONAL LEASED ACCOMMODATION

Got it, here’s how the value of perquisite for personal leased accommodation is calculated under Income Tax rules:

Given:

• Rent paid by employer (lease rent) = Rs. 10,000/month = Rs. 1,20,000 per year

• Eligibility for rent reimbursement = Rs. 8,000/month

• Employee bears Rs. 2,000/month

• Salary = Rs. 12,00,000 per annum

Tax Rule for Lease Accommodation Perquisite (Section 17(2)):

Value of perquisite =
(Actual lease rent paid by employer or 15% of salary, whichever is lower) – Rent paid by employee

Step 1: Calculate 15% of Salary

15% of Rs. 12,00,000 = Rs. 1,80,000 per annum

Step 2: Actual lease rent paid by employer

Rs. 1,20,000 per annum

Step 3: Choose lower of Step 1 and Step 2

Lower = Rs. 1,20,000

Step 4: Deduct rent paid by employee (Rs. 2,000 x 12 = Rs. 24,000)

Value of Perquisite = Rs. 1,20,000 – Rs. 24,000 = Rs. 96,000 per annum

Final: Perquisite value for accommodation = Rs. 96,000 per year

Note:

• The eligibility for rent reimbursement (Rs. 8,000) does not directly affect perquisite calculation; only the actual lease rent paid by employer matters.

• Employee’s contribution reduces the taxable perquisite value.

• This Rs. 96,000 will be added to taxable salary as perquisite.