Income Tax Department’s big announcement: Employees who are well paid and live in rent-free homes provided by their employers will be able to save more. This will increase his take home salary. According to the Central Board of Direct Taxes (CBDT), the new rule has come into effect from September 1.
Income Tax Department: A new rule has come into force for crores of employed people of the country from today. After the implementation of this rule, the inhand salary of the salaried class will increase. Yes, this relief has been given to the employed by the Income Tax Department. Recently, the Income Tax Department had changed the rules related to Rent-Free Accommodation.
Take home salary of employees will increase
Actually, the Income Tax Department has changed the rules for valuation of rent-free homes given to employees. With this, employees who get good salaries and live in rent-free homes provided by the employer will be able to save more. This will increase his take home salary. According to the Central Board of Direct Taxes (CBDT), the new rule has come into effect from September 1.
What was said in the notification?
According to the notification of CBDT, only accommodation (unfurnished) is provided to employees other than Central or State Government employees and if such house belongs to the employer then the assessment will be – Salary in cities with population more than 40 lakh as per 2011 census 10 percent (less than 15 percent) of Earlier this rule was for population more than 25 lakh as per 2001 census.
How to save more?
According to the new rule, 7.5 percent (less than 10 percent) of the salary in cities with population of more than 15 lakh but less than 40 lakh as per 2011 census. Earlier it had a population of not more than 10 lakh but more than 25 lakh as per 2001 census. In this regard, AKM Global Tax Partner Amit Maheshwari had said that employees who are earning adequate salary and are also getting accommodation from the employer, will now be able to save more. In fact, with the revised rate, their taxable base will reduce.
The government has included the 2011 census data under these changes. This will reduce the taxable salary of employees taking advantage of rent free housing. This will increase the take home salary of the employees.
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