Is TDS Applicable to Both House Rent and Furniture Costs in Employee Accommodation?

Dear Experts, Our company is planning to take a house as residential accommodation for our personnel. The rent is split into the House Rent and Furniture and Fittings, i.e., Total Rent is Rs. 25,000/-, in that Rs. 15,000/- as House Rent and the remaining Rs. 10,000/- is for Furniture and Fittings. Hence, please clarify whether both are subject to TDS, or only the House Rent is taxable?

Regards, PBS KUMAR

I think both components will attract TDS. They are charging rent for furnishings; therefore, it comes under rent.

Pon

TDS Deduction on Rent

TDS has to be deducted if the rent during the year exceeds Rs. 180,000. Rent for furniture, furnishings, etc., would be included in the rent amount for computing TDS.

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Dear Mr. Kumar,

Taxation on Rent-Free Accommodation

Rent-free accommodation is not directly taxable. However, if you are in metro cities, 15% of your gross salary will be added towards perquisites and will be taxed. For other cities, it is 10%. Therefore, while considering this option, you should determine which option is more beneficial.

Taxation on Furnishing Allowance

Furnishing allowance is also taxable at 10% of the cost rent on furniture.

Regards,
VGKNAIRVKM