Rent Free Accommodation Calculator

The phrase "accommodation" refers to the following: a flat, a farmhouse or a portion of one, a hotel or guest house, an apartment for service personnel, etc.

It refers to a place of residence provided by an employer for an employee to live in. RFA can be provided either for free or at a reduced fee. Rent-free accommodations are counted as prerequisites. When calculating the taxpayer's total income for the purpose of submitting an Income Tax return, perquisites are added under the heading Salaries. Perquisites comprise the value of rent-free housing granted by each employer to the assessee. The taxpayer may work for more than one employer at the same time. In such cases, the total value of all rent-free lodgings given to the taxpayer will be taxed under the Act.

Accommodation given to an employee is divided into the following categories and tax treatment of each category is separate:-

• Accommodation given by Govt:
  1. Unfurnished Accommodation
  2. Furnished Accommodation
• Accommodation given by Non-Govt:
  1. Unfurnished Accommodation
  2. Furnished Accommodation

The following factors must be considered when calculating the value of rent-free housing offered by a company to an employee:

• The population of the city where rent-free housing is available
• Nature of the furnishings used in the lodging

In the instance of rent-free housing offered to an employee when the property is held by the employer, the value of the perquisite would be computed based on the city's population as of the 2001 census.

If rent-free housing is offered in a city with a population of 10 lakh people, the rent-free housing would be rated as a perk at 7.5 per cent of the pay.

The amount of the perk would be 10% of pay in cities with a population of less than 25 lakh but more than 10 lakh persons.

The rent-free accommodation calculator helps you take the guesswork out of the taxable part of your rent-free accommodation. It's a simple and easy-to-use tool that helps you calculate the taxable value of your accommodation given by your employer.

If you are working with a government or non-government organisation and are receiving unfurnished or furnished accommodation in any of the cities then you are eligible to use the calculator.