Taxability of rent free accomodation provided

[CAGOPALJI AGRAWAL]

Whether rent free accomodation provided by employer is taxable perquisite if the employee could not actully occupied it.

[Surender Gupta]

IF I take this issue from another angle, whether a person who had received an income but could not utilized the same for one reason or another, would be liable to income tax for the income so received? If the answer to this question is yes, the answer to your query would also be yes. The prerequisite of rent free accommodation shall be taxable even if the employee could not occupied it. Yes, if he is able to prove that the same was not provided to him, he can escape from tax. The tax incidence arises in this case when employer provides a rent free accommodation to the employee.

[DEV KUMAR KOTHARI]

In case the employee (and/ or his family) could nto occuply the accomodation due to reasons associated with employment, then the same may not be taxable. E.G. accomodation is allotted during some period say just from the likely day of joining service but the employee did nto occupy accomodation for say two month due to any reason then [erquisite for two month may not be taxable becasue there is no occupancy at all and no availment of perquisite. However, once accomodation is alloted and accepted by employee, then there will be taxable perks for the same, even if for some reason employee did not use it or occupy it in nay manner.

AI Summary

Taxability of rent-free accommodation: allocation and acceptance generally create taxable perquisite unless employee proves non-provision.
Where an employer allocates and the employee accepts rent free accommodation, the benefit is a perquisite and is ordinarily taxable even if the employee does not occupy it; tax may be avoided only by proving the accommodation was not provided or that non occupancy arose from employment related constraints preventing availment.