Rent free accomodation given to Director

This query is : Resolved

umesh_mishra16 (Querist)
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20 March 2008 Dear All,

If anyone could tell me what is the rate for calculating the perquisites amount on salary towards rent free accomodation provided to Director of the Company.
In our case, we have taken accomodation on rent for Director. Please confirm if the rate would be 20% or 15%.
In the Vinod Singhania's book, it is mentioned 20%, however on Income tax site it is 15%. If it is 15%, then by which Circular, the rate is decreased or fixed at 15%

Regards,
Umesh Mishra

Reetika Goel

Reetika Goel (Expert)
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22 March 2008 Hello Umesh,

The rate for RFA is provided into 3 slabs
it is 15% of RFA salary, if the population of the city where RFA is provided exceeds 25,00,000.
It is 10% of RFA salary, if the population of the city where RFA is provided exceeds 10,00,000.
and in all other cases it is 7.5%.

and for the purpose of calculating RFA, RFA salary includes
Basic Pay
Dearness Pay/Allowance
Bonus
Commission
HRA
Gratuity for the period for which RFA is provided.

But it does not include any arrear or advance of salary, any PF contribution, and neither any monetary or non-monetary perquisite.