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TDS and Rent Free Accommodation

Vinothbabu.S (Articled Assistant) (145 Points)

26 February 2009

If the rent free accommodation by the employer to the employee is more than 150000Rs, Which form should be furnished by the employer to the employee?

Form 12BA or Form 16?

Thanks in Advance,

S.vinothbabu

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8 Replies

CA Sakshi (CA Practice) (309 Points)
Replied 26 February 2009

In many cases i have seen 12BA form attached with Form 16 which is regarding perquisites. You have to provide both forms as they solve different purpose . Form 16 shows the salary descripttion, TDS, and any other income -for filling return its necessary. Form 12BA explains the perquisites value provided to employee.

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Vinothbabu.S (Articled Assistant) (145 Points)
Replied 26 February 2009

Thank you sir.

Ashish M (Chartered Accountant) (2731 Points)
Replied 27 February 2009

now returns have become electronic....even paper return is not to be attached with any certificate.

Jyoti (job) (37 Points)
Replied 03 March 2009

I would like to get some clarification. Suppose a person is drawing monthly professional fees rs 80000 and I am deducting TDS and paying the balance amount now the company decided to reimburse his house rent (say rs 10000 per month) so how should i will treat this nature of expenses, becuase he is not cover under salary but he is permanant employee of Company.

Should i deducted TDS on this rs 10000 or if i will treat reimbursment of house rent that means it will attract FBT on the company??? pl clarify

Regards Jyoti

sudhir (Service) (22 Points)
Replied 03 March 2009

Joyti : normally its depends on company policy. However if u specifally book to rent alc

than u must have to deduct tds if yearly rent above 120000/- otherwise if u booked to any other

account as allowance or facility provided by company to employee (without deducting any tax )than it is chargable to FBT as facility provided by company to employee

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Ashish M (Chartered Accountant) (2731 Points)
Replied 04 March 2009

jyoti: U said u give the person 'professional fees' and later u said he the permanent employee of ur company...........an employee is given salary and professionals who render professional services r given professional fees......

ur payment may be deemed professional fees only if that person is not ur permanent employee but u take professional services from him on monthly basis..........

Since u mentioned that u deduct TDS as professional fees, then the payment by u of Rs.10000 is his income in the course of profession and no TDS will be deducted on this payment under any section of TDS chapter in income tax........accordingly u can reimburse the amount without withholding any tax on it..........

and as for FBT, the payment of Rs.10000 is no covered under any clause of FBT the benificiary is not an employee............

Jyoti (job) (37 Points)
Replied 04 March 2009

boss, let me clear it,

a) an employee draw monthly professional fees & TDS is deducted u/s 194J, ok fine
b) now the company decided to reimburse his house rent, say rs 10000 per month as he is under professional so i can't consider him accommodation provided by Company accordingly. so how & what manner I will reimburse rs 10000. Could I book under "RENT a/c" but this is reimbursment so should i proceeds with "RENT REIMBURSEMNET Ac/" if rent reimbursment then it mean Company is giving benefit to a person then it will attract FBT. or not. ...... Jyoti

Sorabh Gupta (Manager ( Taxation )) (877 Points)
Replied 04 March 2009

Hey Jyoti

Look as u told that an employee draw prfessional fees & TDS deduted on it & company now decide to reimburse his house rent Rs. 10000. So if he raises consolidate bill then TDS on full amount otherwise TDS only on professional fees and no TDS on rent reimbursement.

now talking abt FBT, if company give some benefits to employee then FBT & in that case he is not employee , so no FBT.

Regards

SORABH GUPTA