Method of valuation of rent free residential accommodation is governed by Rule 3 of the Income Tax Rules. However, in case the accommodation is provided at concessional rate, then the perquisite value will be computed as per Explanations to section 17(2)(ii) inserted by the Finance Act, 2007.
Rent free residential accommodation provided to the Government Employees will be valued as under:
- Where unfurnished accommodation is provided by the Central Government or any State Government, the value of the perquisite is the license fee determined by the Central Government or any State Government in respect of the accommodation in accordance with the rules framed by such Government, as reduced by the rent actually paid by the employee.
- Where furnished accommodation is provided by the above employer then the value of the perquisite shall be first computed as if unfurnished accommodation is provided. The value so arrived at shall be increased by 10% of the cost of furniture (including television sets, radio sets, refrigerators, other household appliances, air conditioning plant or equipment) and in case, the furniture is hired from a third party, the actual hire charges payable for the same as reduced by any charges paid or payable for the same by the employee during the previous year.
Tax Returns for Financial Year 2010 -11 (March 2011) has started.Â JustÂ mail us Form16/ Salary Certificate and details of other income,Â at Â firstname.lastname@example.org . We would take it from there to file your return of income.
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