Valuation of Rent Free House

Rent-Free Accommodation – Rule 3 (a) To calculate the value of rent-free accommodation, furnished or otherwise, employees have been classified into: government employees, semi-government employees and employees of private sector.

(a) Government Employees: Under government employees come Central and State Government employees; and those government officials who are working in a organization under government control and are living in an accommodation provided by the organization.

(i)     Unfurnished accommodation: The value of the residential unfurnished accommodation is taken as the rent paid or determined by the rules framed by the government at that time according to the type of the employee/officer.

(ii)     Furnished Accommodation: The value of the furnished residence provided to the employee is calculated by adding the value of the unfurnished accommodation and 10% per annum of the original cost of the furniture including TV and other household appliances. If the furniture is hired, the actual hire charges are added.  The following do not have to pay income tax on the rent-free accommodation provided to them: (a) Judge of a High Court or Supreme Court; (b) A minister, an officer of parliament and a leader of the opposition.

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