CBDT Notifies Rule For Determination of Value of "perquisite" in respect of residential accommodation 

The Central Board of Direct Taxes (CBDT) has changed the rules for calculating the value of benefits like housing provided by employers. Starting from September 1, 2023, this update affects how different cities and population areas are grouped, and it also changes the rates for these benefits based on the 2011 census. This announcement explains the main parts of the change and what it means.

The Finance Act of 2023 made changes to how we calculate the value of perks like free or cheaper housing given by employers to employees. So, the CBDT adjusted Rule 3 of the Income Tax Rules, 1962, to fit these changes. 

The new rule presents some clear instructions on how to decide the value of housing perks, considering different situations. Significant changes include putting cities and limits into new groups based on the 2011 census. 

The old rates of 15%, 10%, and 7.5% have become 10%, 7.5%, and 5% of salary. This change applies depending on where you live, as shown by census data. The difference also thinks about cases where an employee stays in the same place for many years, trying to make taxes fair.

Notification No. 65/2023 dated 18th August 2023 has been published and reads as follows-

Notification No. 65/2023 dated 18th August 2023 has been published and is available at 

egazette.nic.in 

Summing it up, the change which CBDT made to the Income Tax Rules, 1962, shows the government wants to keep rules current and useful. By using 2011 census info and changing the rates for benefits, this update makes a fairer way to decide the value of housing benefits. Both employers and workers will like the clear and open rules this brings, making taxes work better for everyone.

Also Read: How to identify fake GST? Difference between original and fake GST

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