Notification dated 18.08.2023 read with Corrigendum dated 29.08.2023
∞ The Central Board of Direct Taxes in the Income Tax (Eighteenth Amendment), Rules, 2023 has
amended Rule 3(1) of Income tax Rules, (“the Rules”) w.e.f. September 01, 2023 [Notification No.
65/2023/F. No. 370142/21/2023-TPL Part (1) dated August 18, 2023].
∞ Lately, the CBDT also notified Corrigendum [Notification No. 72/2023/F. No 370142/21/2023-TPL Part (1) dated August 29, 2023] to Notification dated August 18, 2023.
∞ To summarise briefly, the following changes are brought in Rule 3(1) vide Notification dated August 18, 2023 read with Corrigendum dated August 29, 2023 for calculating perquisite value of rent-free/concessional residential accommodation w.e.f. September 01, 2023:
i. Reduced valuation rates where unfurnished accommodation is owned by the employer:
ii. Reduced valuation rate where unfurnished accommodation is taken on lease or rent by the employer:
iii. In case of temporary accommodation provided to an employee working at a mining site / on-shore oil exploration site / project execution site / dam site / power generation site / off-shore site, the exemption limit is increased to an area not exceeding 1000 sq. ft., from existing 800 sq. ft
iv. Where accommodation (furnished or unfurnished) is owned or leased/rented[4] by employer and is continued to be provided to the same employee for more than 1 previous year, the perquisite value for subsequent previous year (PY) shall be lower of:
- Amount calculated as per i or ii, as the case may be; or
- (Perquisite value calculated for first PY X CII for subsequent PY) / CII of PY in which accommodation was initially provided
o CII refers to the index notified by the CG in the Official Gazette for the purposes of section 48
o First PY corresponds to: - PY 2023-24; or - PY in which the accommodation was provided to the employee whichever is later.
v. For Government employees on deputation with another Government body or undertaking, such body/undertaking will be deemed to be the employer and perquisite value will be computed as per i.
vi. Additionally, the definition of “remote area” is amended as under:
The above document is contributed by – Krupa Gandhi, Partner and Akta Shah, Senior Manager
[1] As per 2001 census
[2] As per 2011 census
[3] Of Salary
[4] CBDT notified the Corrigendum dated August 29, 2023 to include leased or rented accommodation
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