02-25-2010, 05:56 PM
Dear,
If an employee has rented out his own (or his family membersâ) property to the employer and employer has provided the same to the same employee (Letâs suppose, A is an employee and B is his employer, A rented his house to B and B provided the same to A). This transaction will have two fold effects, first, this will be treated as a rent free accommodation to employee on behalf of employer and fair market value of rent will be added to the taxable income of the employee under the head Salary, since this is to be treated as a perquisite to employee.
Second, Value of fair market rent, during a specified year, will be taxable to employee (landlord) under the head âIncome from Propertyâ.
Should still any confusion exists, let me know.
Best Regards,
Faisal.
If an employee has rented out his own (or his family membersâ) property to the employer and employer has provided the same to the same employee (Letâs suppose, A is an employee and B is his employer, A rented his house to B and B provided the same to A). This transaction will have two fold effects, first, this will be treated as a rent free accommodation to employee on behalf of employer and fair market value of rent will be added to the taxable income of the employee under the head Salary, since this is to be treated as a perquisite to employee.
Second, Value of fair market rent, during a specified year, will be taxable to employee (landlord) under the head âIncome from Propertyâ.
Should still any confusion exists, let me know.
Best Regards,
Faisal.
