It means
free house provided by Employer to Employee.
Such house may be taken on rent by Employer or owned by Employer
In this case, taxable Perquisite is calculated as follows
Meaning of Salary for RFA
Here Salary means
= Basic
+ DA (Included in Retirement Benefits)
+ Taxable Allowance
This Salary is taken at due basis
However Salary does not include
(a)Perquisites
(b)Employers contribution to PF
(c)Exempt Allowance
(d)DA (Not forming part of Retirement Benefits)
(e)Perquisites like Medical Reimbursements/ESOP [ Employee stocks option plan]
Q1
| Basic Salary | 100000 pm |
| He is given free house by compay | |
| Rent paid for the house by Company directly | 20000 pm |
Calculate RFA Perquisite and Income from Salary?
--answer--
| Salary for RFA | 100000 |
| 15% OF SALARY | 15000 |
| Rent Paid | 20000 |
| LOWER OF ABOVE | 15000 |
| RFA TAXABLE p.m | 15000 |
| RFA TAXABLE p.a | 180000 |
COMPUTATION OF INCOME FROM SALARY
| PARTICULARS | AMT RECD | EXEMPT | TAXABLE |
| BASIC SALARY | 100000 | 100000 | |
| RFA Perquisite | 15000 | ||
| Total | 100000 | 115000 | |
| Income from salary | 115000*12=1380000 |
--endanswer--
Q2
| Basic Salary | 20000 |
| DA (included in Retirement Benefits) | 10000 |
| Children Education Allowance | 1500 |
| (500*3 Child) | |
| Electricity Bill Reimbursement | 1000 |
| Free Alto Car for Employee | |
| Car Cost | 300000 |
| He is given free house by compay | |
| Rent paid for the house by Company directly | 10000 |
Calculate RFA Perquisite and Income from Salary?
--answer--
SALARY OF RFA
| PARTICULARS | AMT RECD | EXEMPT | TAXABLE |
| Basic Salary | 20000 | 0 | 20000 |
| DA (included in Retirement Benefits) | 10000 | 0 | 10000 |
| Children Education Allowance | 1500 | 200 | 1300 |
| SALARY FOR RFA | 31300 |
RFA PERQUISITE
| SALARY FOR RFA | 31300 | ||
| 15% OF SALARY | 4695 | ||
| Rent Paid | 10000 | ||
| RFA Perquisite :-LOWER OF ABOVE | 4695 |
COMPUTATION OF INCOME FROM SALARY
| PARTICULARS | AMT RECD | EXEMPT | Amt taxable |
| BASIC SALARY | 20000 | 0 | 20000 |
| DA (included in Retirement Benefits) | 10000 | 0 | 10000 |
| Children Education Allowance | 1500 | 200 | 1300 |
| Electricity Bill Reimbursement | 1000 | 1000 | |
| Car Perquisite | 600 | ||
| RFA Perquisite | 4695 | ||
| Income from Salary | 37595 | ||
| Annual Income from Salary | 451140 |
--endanswer--
RFA FOR FURNISHED HOUSE
Sometimes,furnished house given to employee i.e it has funiture and Machines like AC etc in it.
In that case,we will take
10% dep on them
or
rent paid by Co on them
to calculate RFA Perquisite
Q3 Suppose in Q2
| COMPANY HAS TAKEN AC ON RENT | 1000 |
| COMPANY HAS PUCHASED FURNITURE | 30000 |
| CALCULATE RFA PERQUISITE |
--answer--
| RFA FOR UNFURNISHED HOUSE | 4695 |
| (AS PER Q2) | |
| ADD | |
| RENT ON AC | 1000 |
| ADD | |
| 10% DEP ON FURNITURE | 250 |
| (30000*10%*1/12) | |
| RFA FOR FURNISHED HOUSE | 5945 |
--endanswer--
ACCOMODATION AT CONCESSIONAL RENT
In this case,house is not given free.Some Rent is charged from employee.
In this case,computation made as follows
| RFA FOR FURNISHED HOUSE | xx |
| Less | |
| Rent Charged from Employee | XX |
| BALANCE AMT TAXABLE AS ACCOMODATION AT CONCESSIONAL RENT | XX |
Q4
Suppose in last question,House given is not free
Company Charges Concessional Rent of 2000 pm
--answer--
| RFA FOR FURNISHED HOUSE | 5945 |
| Less | |
| Rent Charged from Employee | 2000 |
| BALANCE AMT TAXABLE AS ACCOMODATION AT CONCESSIONAL RENT | 3945 |
Note
If Employee receives salary from more than one Employer then both salaries to be taken .
