Impact of section 17(2) in computing rent-free/concessional value of accommodation

CA V.K. Subramani

Rent-free accommodation or accommodation at concessional rent is provided by the employer to employee as part of salary package. It is altogether a different matter that, now a days employees after some time avail housing loan for identifying own accommodation by way of purchase or construction. In such case, the employee is given housing rent allowance (HRA) instead of accommodation by the employer. The HRA so received would become taxable subject to provisions of section 10(13A). However, the employee is eligible for claiming housing loan interest while computing income under the head 'house property' and principal amount of loan repaid as deduction under section 80C. These benefits, would not be available if the assessee opts for section 115BAC with property being claimed as self-occupied or not being occupied owing to employment in other place and had to reside in a building not belonging to him.

Valuation of rent-free accommodation is the focus of this update and it is listed below --