The income tax department has announced major relief to taxpayers, availing company-provided rent-free homes. It has lowered the tax for employees staying in such accommodations. The new rule comes into effect from today, September 1, 2023.
Income tax rules for company-provided rent-free homes
1)10 percent of salary in cities having a population exceeding 40 lakh as per the 2011 census.
2)7.5 percent of salary in cities having a population exceeding 15 lakh but not exceeding 40 lakh as per the 2011 census.
What is perquisite?
The value of rent-free provided to an employee by the employer is taxable as perquisite.
How new income tax rules will impact the Employee?
The taxable value of rent-free accommodation will be reduced which means employees will pay less tax resulting in an increase in their take-home salary.