Perks like free accomodation, electricity charges not taxed

Sanjay Murarka (B.Com) (30 Points)

23 December 2012  

 

There is a company ABC which has employees on its payroll. 
This company, through cross-holdings and other other means, is related to company XYZ.

1)The company XYZ gives free accommodation, bears society maintenance charges and electricity charges for the employees of company ABC.
2)Since ABC is not directly providing the perks, the employees are in fact enjoying them tax-free as the perks are not even reflecting in the Salary Certificates of the employees.
3)If perks are offered in such indirect manner, are they allowed tax-free?
4)If these perks are taxable, who is responsible to deduct/pay the taxes on the perks, the company ABC or the employees enjoying the perks? 
5)Or, is this a normal practice of Indian companies?