CBDT Latest Notification: The Central Board of Direct Taxes has notified the changes. According to the notification, these changes will come into effect from the beginning of next month.
The Income Tax Department on Saturday gave huge relief to lakhs of salaried taxpayers (employees). The department has made some changes in the rules related to rent-free homes. These changes will be implemented soon and after their implementation, the in-hand i.e. take home salary of many salaried taxpayers will increase.
CBDT issued notification
According to a report by news agency PTI, the Central Board of Direct Taxes (CBDT) issued a notification in this regard on Saturday, August 19. This notification is related to the rent-free home or rent-free accommodation provided by the employers ie companies to their employees. CBDT said in the notification that the proposed changes will come into effect from the beginning of next month.
Changes will be implemented from next month
The Income Tax Department has changed the provisions regarding the facility provided for rent-free accommodation. According to the notification, those employees, who have been given the facility of rent-free accommodation by the employers, will now be able to save more than before and their take home salary is going to increase. This means that the take home salary of the employees affected by the change will increase from next month, as the new provisions are coming into force from 1 September 2023.
Such employees will get benefits
According to the notification, in cases where unfurnished accommodation is provided to employees other than Central Government or State Government employees and the ownership of that accommodation is with the employer, the valuation will now be as follows-
Such changed value formula
1) 10% of salary in cities with a population of more than 40 lakhs as per 2011 census. (Earlier it was equal to 15 per cent of the salary in cities with a population of 2.5 million as per the 2001 census.)
2) Equal to 7.5% of salary in cities with population less than 40 lakhs but more than 15 lakhs as per 2011 population. (Earlier it was 10 per cent in cities with a population of 10 to 25 lakh on the basis of 2001 population.)
Will benefit in this way
The effect of this decision will be that for the employees who are living in rent free houses provided by their employers, the calculation of rent will now be done according to the changed formula. In the changed formula, the rate of valuation has been reduced. This means that now there will be less deduction from the total salary, which ultimately means an increase in the take home salary every month.
