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Taxability of Rent Free Accomodation

Others 954 views 1 replies

Shikha Sharma

Chartered Accountant

311 Points Joined June 2008

Hi friends,

If the company provides accommodation to its employee in the financial year 2007-08, and accounts the rent paid in its books as an expense, is FBT applicable on the same.... Is the employer liable for FBT on the same... Isn't it taxable in the hands of employee under salaries as perquisites....

Actually in a scrutiny, assessing officer is contending that the Company should have paid FBT on rent borne on behalf of the employee. Is he right in his contention....

Thanks in advance.

Replies (1)

Guest

dear shikha

rfa is defined specifically by the income tax law.there is no applicability of fbt since the same is always taxable in the hands of employee. if the AO is looking for obligation point of view then obligation is also taxable in the hands of employee in this case whether employer is liable to fbt or not.

regards

tarun rustagi