Taxation of Employee Benefits: TDS on value of accommodation provided to the employees at the rate of 15 percent of salary

Perquisite valuation: absence of employer concession leads to no TDS on rent-free employee accommodation under valuation rules.

The tribunal concluded that perquisite taxation on rent-free accommodation requires a demonstrable concession by the employer; in the absence of such concession the perquisite value is nil. Although the institution is not a Central Government entity, the Revenue's invocation of Rule 3 and fixed percentage valuation was premature. The appellate deletion of the withholding demand was affirmed on the ground that no concession existed and therefore no taxable perquisite arose.