friends incase of rent free accomodation where facility is hired by employer ,
for computation of perquisite value of such facility , what is the salary meaning? is it basic + da +?
CA J.Alamelu lakshmi
(Chartered Accountant)
(852 Points)
Replied 01 August 2011
Salary includes Basic, Allowances, bonus, Commission or any other monetary payment by watever name called from one or more employers but does not include DA, EPF contribution of employer, allowances which are exempt, lump sum payments recd at the time of termination of service.
kamal kishor sen
(STUDENT Rajasthan)
(2156 Points)
Replied 01 August 2011
Private sector or other employer:-
Rent free accomodation depends on salary of the employee and lease rent of accomodation.
Salary --- How To Calculate - For the purpose of valuation of perquisite in respect of rent-free accomodation, salary includes:
A. Basic salary
B. Dearness allowanc/ pay, if terms of employment so provide ;
C. Bonus;
D. Commision;
E. Fees;
F. All other taxable allowancs (excluding amount not taxable); and
G. Any monetary payment which is chargeable to tax (by whatever name called).
For this purpose salary does not include the following:
A. Dearness allowance/pay, if not taken into account while calculating retirement benefits, like provident fund, gratuity, etc. or if term of employment does not so provide;
B. Employer's contribution to provident fund account of an employee;
C. All allowances which are exempt from tax ; and
D. Value of perquisites[under section 17(2)].
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