New earnings tax guidelines for these salaried taxpayers from as we speak. Details right here

New earnings tax guidelines for these salaried taxpayers: The earnings tax division has introduced main aid to taxpayers, availing company-provided rent-free houses. It has lowered the tax for workers staying in such lodging. The new rule comes into impact from as we speak, September 1, 2023.

Income tax guidelines for company-provided rent-free houses

1)10 % of wage in cities having a inhabitants exceeding 40 lakh as per the 2011 census.

2)7.5 % of wage in cities having a inhabitants exceeding 15 lakh however not exceeding 40 lakh as per the 2011 census.

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The rule for dedication of the worth of perquisite in respect of residential lodging offered by employer. (PIB)

What is perquisite?

The worth of rent-free offered to an worker by the employer is taxable as perquisite.

How new earnings tax guidelines will influence the Employee?

The taxable worth of rent-free lodging will likely be diminished which suggests workers pays much less tax leading to a rise of their take-home wage.

“Employees who keep in lodging, owned/rented by the employers, rent-free, may see a drop within the taxable perquisite worth thereby decreasing the tax burden. Which would allow them to get a bit more cash of their hand,” said Archit Gupta, Founder, and CEO, of Clear.

These taxpayers will benefit from this rule change

As per CBDT’s notification, the changes are expected to particularly benefit high-earning individuals who receive employer-provided housing perks.

Will you benefit?

Tax and investment expert Balwant Jain said that the employer has to see the calculation of “perquisite” with regard to the worth of rent-free. On who will likely be impacted by this modification, he added that ‘rent-free accommodation is provided by only a handful of employers.’ He additional added that its direct impact will likely be seen on workers’ salaries. “Due to much less tax, the wage acquired in hand will likely be extra,” mentioned Jain.

The Central Board of Direct Taxes (CBDT) has notified amendments to the Income Tax Rules for valuing perquisites of rent-free or concessional lodging by employers to workers.

The Finance Act, of 2023, had introduced in an modification for the needs of calculation of ‘perquisite’ with regard to the worth of rent-free or concessional lodging offered to an worker, by his employer.

Disclaimer: The views and suggestions made above are these of particular person analysts, and never of Mint. We advise traders to examine with licensed consultants earlier than taking any funding choices.

-With company inputs

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Updated: 01 Sep 2023, 01:37 PM IST