Rented accomodation provided by employer

This query is : Resolved

CA Neha Jain (Querist)
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21 September 2011 Company has taken a flats on rent and provided it to employees. Company recovers the full rent paid for these flats from employees.

Employees also get HRA as part of the salary.

Qurry: Will this be treated as perquisite or normal exemption from HRA will be given to employee.

CMA Ashutosh Kumar Gupta

CMA Ashutosh Kumar Gupta (Expert)
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21 September 2011 Company is not providing therefore, the Rent Free Accommodation to the employees hence no perquisite in the hands of employees.
HRA Rules for exemption will be applicable as prescribed, however while calculating the exemption care needs to be taken as regards the condition of rent paid in excess of 10% of salary, here rent will be the rent being paid by employees to the company against rent receipts.