This means that assets are owned by company but are being used by employee free of cost.
If a company provides moveable assets for free use to employee,then
Rent paid by company on it
or
10% Dep on asset
is taxable perquisite
However if Laptops or Computers provided, then it is exempt
Note:-
Only moveable assets are covered in this provision
In case ,immoveable property (house) used by employee,it is covered in Rent free Accomodation
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QUESTIONS
Q1 The company provide the following assets for free use at
Employee's home for personal use
a.Laptop – Rs.40000 (purchased by the company)
View answer
Exempt(Laptops/Computers if provided are exempt
b.Computer taken on rent by the company = Rs.2,000 rent paid
View answer
Exempt(Laptops/Computers if provided are exempt
c.Furniture – Rs.100,000 owned by the company
View answer
Taxable
Taxable Perquisite=10% dep, i.e.,100,000*10% = 10,000
d.AC (air conditioner) taken on rent Rs.3,000 per month
---answer--
Taxable
Taxable Perquisite= Rent on AC = 3000*12 = 36000
Q2 Suppose in Q1 The company charges rent from Employees as follows
Laptop – 500 P.M
Computer – 600 p.m.
Furniture – 400 p.m.
AC 1000 p.m.
View answer
If any amount recovered then balance amount would be taxable however computer and Laptop will remain exempt
Laptop = exempt
Computer = exempt
Furniture = 10,000 - 400*12 = 5,200
AC= 36000 – (1000*12)= 36000 – 12000 = 24000