New Delhi [India], August 20 (ANI): Employees drawing substantial salaries and having rent-free accommodation provided by their employers will now be able to save more and get a higher take-home salary as the income tax department has revised norms for valuing such perquisites.
Board of Direct Taxes, the Central Board of Direct Taxes (CBDT) on Saturday notified amendments to the Income Tax Rules for valuing perquisites of rent-free or concessional accommodation by employers to employees.
The rules will come into effect from September 1.
The Finance Act, of 2023, had brought in an amendment for the purposes of calculation of ‘perquisite’ with regard to the value of rent-free or concessional accommodation provided to an employee, by his employer. The rules for calculating perquisites have been notified now.
“The categorisation and the limits of cities and population have now been based on the 2011 census as against the 2001 census earlier,” the income tax department said in a statement on Saturday.
Accordingly, CBDT has modified Rule 3 of the Income-tax Rules, 1961 to provide for the same. The categorisation and the limits of cities and population have now been based on the 2011 census as against the 2001 census earlier.
The revised limits of the population are 40 lahks in place of 25 lahks and 15 lahks in place of 10 lahks. The earlier prerequisite rates of 15 per cent, 10 per cent and 7.5 per cent of the salary have now been reduced to 10 per cent, 7.5 per cent and 5 per cent of the salary in the amended Rule.
The Rule has also been further rationalised so as to compute a fair tax implication of the same accommodation being occupied by an employee for more than one previous year. (ANI)
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