Salary Tax Rules: The rules of Rent Free Home have been updated. This decision will benefit those employed people, whose salary is good and who have been provided rent-free homes by their employers. The Central Board of Direct Taxes (CBDT) has changed the rules for the assessment of rent-free accommodation provided by employers to employees.
CBDT’s New Rule
The CBDT’s decision will have more benefits for top management professionals and other high-salaried employees. In fact, those workers will now be able to save more and take home more cash in the name of salary than before. Let us tell you that the Income Tax rules have been amended and these new rules will come into effect from September 1.
As per the notification, where unfurnished accommodation is provided to employees and such accommodation is owned by the employer, the assessment will be 10 per cent of the salary, which is now 15 per cent in cities with a population of more than 4 million as per the 2011 census. (Earlier, 2.5 million according to the 2001 census).
Take-Home Benefits
In cities with a population of more than 1.5 million but not more than 4 million as of the 2011 Census (earlier, 1 to 2.5 million as of the 2001 Census), such assessment was reduced from 10 per cent of pay to 7.5 per cent Will be done.
As a result, the reduced value of perquisite will be added to the cost to the company (CTC) of the beneficiary-employee and taxed as per his income bracket and tax regime chosen. This will result in less tax to be paid and more take-home pay.
