Value of Rent Free unfurnished accomodation

This query is : Resolved

HARIHARAN KRISHNAMURTHY (Querist)
Follow

09 July 2010 Dear Experts,

Kindy clarify the following :

Mr. A was in an employment with XYZ co. Ltd for only 1 month of the year 2009-10. Mr. A was provided an rent free unfurnished accomodation by his employer , where the rent paid by the employer was INR 11,500 p.m.

What should be the value of perquisites shown in the IT return of Mr. A.
The employer has shown a value of INR 133,043 in the form 16 of Mr. A.( may be this is the lower of rent paid or 15% of salary).

What should Mr. A shown as perq in his IT return .

Thanks in advance.

CMA. Dinesh S Adhikari, ACMA

CMA. Dinesh S Adhikari, ACMA (Expert)
Follow

09 July 2010 Dear Hari,

If Mr. A occupied that RFA only for one month then salary will also be computed for one month only and 15% will be computed on that amount not for the whole year salary.

Now, Least of the following will be taxable in the hands of the employee:
a) 15% of salary(one month), or
b) Rs. 11,500.

Now, i think Rs. 1,33,043 is the 15% of the whole year salary.

Therefore, taxable amount should be Rs. 11086(133043/12), because it is lower then Rs. 11,500.

Regards!!!
Dinesh S. Adhikari