Someone please tell me what would be a Perquisite Value of Rent free Accommodation?

Ganesh · 11 Jan 2025

Certainly, let's calculate the perquisite value of rent-free accommodation for Mr. Kadam. Perquisite Value of Rent-Free Accommodation In India, the perquisite value of rent-free accommodation provided by an employer is calculated based on the following factors: * Salary: Mr. Kadam's salary is ₹40,000 per month. * Rent Paid: The rent for the hired accommodation in New Delhi is ₹6,000 per month. * Metro City: New Delhi is considered a metro city for tax purposes. Formula for Perquisite Value: For metro cities, the perquisite value is calculated as follows: * If salary is up to ₹50,000 per month: 10% of salary or rent paid, whichever is less. * If salary is above ₹50,000 per month: 15% of salary or rent paid, whichever is less. Calculation: Since Mr. Kadam's salary is ₹40,000 per month, we'll use the first part of the formula: * 10% of salary = 10% of ₹40,000 = ₹4,000 * Rent paid = ₹6,000 Therefore, the perquisite value of the rent-free accommodation is ₹4,000 per month. Additional Points: * If the rent paid is less than 10% of the salary, then the perquisite value will be the actual rent paid. * This calculation is based on the assumption that Mr. Kadam exercises the option to shift out of the default tax regime under section 115BAC. The calculation might be slightly different under the default tax regime. Let me know if you have any further questions!