RFA in case of shared accommodation is given to employees

[Gaurav Jhunjhunwala]

Dear All,

 

A Chennai based Company gives Rent Free Accommodation i.e. a flat to two of their employees on shared basis. According to provisions Company intends to deduct TDS of 15% of salary(as prescribed in the section) of both of the employees. 

According to my understanding, since the accommodation is shared, TDS on RFA should also be proportionately calculated i.e. 7.5 of the salary to each of the employees. 

Revenue should not be receiving doublei/triple/.........  tax just because the accommodation is shared between more than one employees.

Please give your view on this. A case law on this would be very helpful.   

Regards

Gaurav Jhunjhunwala

M.Com, ACA, CS, DISA(ICAI) 

Contact: +919884262127

[Kirti Tulsyan]

REPLY 1

Salary is quantifiable and therefore, it has to be 15% on salary. Extent of accommodation used and value derived by the employee from accommodation is vague and not quantifiable. Same rule cannot be applied to employees drawing different salaries and different rule cannot be applied to employees enjoying different accommodation. Taj Mahal like accommodation and a simple 1 BHK Flat are both accommodation.

 

JNGupta

--

Best Regards, 
Kirti Tulsyan
B.Com.,ACA,CS


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