CBDT notifies Rule for determination of value of perquisite
With reference to the above subject and the attached gazette publications, wef 01.09.2023, the perquisite for residential accommodation provided by employer will be taxed as per the new rule. CBDT has modified Rule 3 of Income Tax Rules, 1961 to provide for the same.
The categorization and the limits of cities and population have now been based on the 2011 census as against the 2001 census earlier.
The following table displays the revised categorisation and rates:
Perquisite Rate for Accommodation owned by employer and given to an employee
| Previous Categorisation and Rates | New Categorisation and Rates | ||
| Population | Perquisite rate | Population | Perquisite rate |
| More than 25 lakh | 15% | More than 40 lakh | 10% |
| Between 10 lakh to 25 lakh | 10% | Between 15 lakh and 40 lakh | 7.5% |
| Less than 10 lakh | 7.5% | Less than 15 lakh | 5% |
The Rule has also been further rationalized so as to compute a fair tax implication of the same accommodation being occupied by an employee for more than one previous year.
The first tax year is tax year 2023-24 or the tax year in which the accommodation is provided to the employee, whichever is later.
For a detailed note and notification, please write to sayali@payrule.in.