Who Pays Property Tax When Employees Live in Company Accommodation?

Team, I have a query. If the employee is residing in company accommodation, in that case, who will pay the property tax - the employee or the employer? Please clarify.

Dear Neelesh Goyal,

Does the company own the accommodation, or is it a rented one? If it is the latter, then the house owner is expected to pay the property tax. However, if the company owns the accommodation, then there is no hard and fast rule regarding the payment of the property tax.

Accommodation Allotment and Associated Charges

Companies provide accommodation to selected employees. The decision on the allotment of the accommodation is made on a case-by-case basis. It is not just the decision on the payment of the property tax, but the decision will also have to be made on the payment of (a) Maintenance charges to the management committee of the association (b) Electricity charges (c) Water charges and (d) Charges for minor repairs.

When allotting the accommodation, companies enter into an internal agreement with the employee. This agreement includes all the clauses, including the clauses on payment.

Thanks,

Dinesh Divekar

Property Tax Responsibility

Property tax is levied as per the statute on the local self-government authority (such as the Municipal Corporation, Municipality, or Panchayat) in the respective state. Perhaps the Madhya Pradesh Act would apply in your case, and it has to be looked into. As a general rule, it is the property owner who is liable to pay the property tax.

Rate of Taxation

Regarding the rate of taxation, please understand that for the property in possession of the employees, the rate has to be based on self-occupied status and not commercial or any other usage.