Is Company owned guest house liable to house perquisite

Our Company has a guest house owned by it. Three Executives are staying there for the past 2 years and are paying subsidised room rent. My question is can we deduct tax on house perquiste from them. My GM(Finance) says Guest House does not come under house perquisite. Kindly advice.

asked Apr 04 '12 at 13:13 by suman 1123

Employee are liable to pay income tax on the perquisite value of the house provided by company.

The perquisite value of the house would be 7.5%-15% (depending on city population) of salary minus actual rent paid by employee to employer.

This value would be added to employee's taxable income under head income from salaries and taxed as per slab rates.

answered Apr 04 '12 at 14:27 by Pankaj Batra 5.2k320

my question was specific..i.e "guest house" owned by the company. house perquisite is being deducted for company owned quarters but not for guest house in our company. The reason cited by the finance deptt. is that no allotment order has been given by the personnel deptt. for guest house.
(Apr 04 '12 at 21:40) suman
Guest house may have a rental value and company may be already paying rent for same. It should have perquisite value for employee using this benefit.
(Apr 05 '12 at 00:17) Pankaj Batra

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Asked: Apr 04 '12 at 13:13

Seen: 3,288 times

Last updated: Apr 05 '12 at 00:17