Sage-Tips

What is the difference between leased accommodation and HRA?

At this point, the employee may have a choice—to lease the house herself and receive a house rent allowance (HRA) from the employer to cover the rent (the HRA route) or to have the employer enter into the lease and pay the rent directly to the landlord (i.e, opt for company leased accommodation).

What is leased house accommodation for bank po?

Where a bank does not have enough houses/ flats of its own, it provides leased accommodation or gives a house rent allowance. You are eligible from the very first day of joining. There is no criteria for minimum service period to avail accommodation facility.

Is bank leased accommodation taxable?

If the Unfurnished Accommodation given to the employee is leased out or rented by the employer then the income tax chargeable on the perquisite will be the amount that the employer pays as part of the lease or 15\% of the employee’s income or salary, depending on which amount is lower, minus the rent that the employee …

What is lease and HRA?

What is company leased accommodation?

The employer enters into the lease agreement with the landlord, pays the rental deposit and pays the monthly rent directly to the landlord. The house may be a ‘ready to move in’ accommodation, pre-identified by the company or it could be a house of the employee’s choice.

Why do companies give HRA?

That HRA, or House Rent Allowance given for expenses related to rented accommodation, is not just a benefit given by companies to it employees. For you, the employee, it can also help you save tax. Please note that if you do not live in a rented accommodation, this allowance is fully taxable.

What is the full form of HRA in salary?

HRA full form is House Rent Allowance. It is a part of your salary provided by the employer for the expenses incurred towards rented accommodation. You can claim HRA exemption only if you are residing in a rented house. HRA exemption is covered under Section 10(13A) along with rule 2A of the Income Tax Act, 1961.

What is term leased?

A fixed-term lease, or term lease, refers to a rental lease with a designated start date and end date. Term lease agreements typically range from 6-months to one year. There are instances, however, of term lease agreements ranging for longer periods of time, like a 2-3 years.

What is the difference between company-leased accommodation and HRA?

Company-leased accommodation is considered a perquisite in the hands of the employee, and its value is determined as per the income tax rules. On the other hand, in the HRA route, rent paid by the employee makes her eligible to claim tax exemption in respect of the HRA she receives

What is HRA (house rent allowance)?

House Rent Allowance (H.R.A.) results in tax savings because accounting under Income tax act is direct exemption based. However, accounting of Rent Free accommodation is valuation based taxation and added to total income of employee presumptive basis.

What is the difference between house rent allowance and rent free accommodation?

House Rent Allowance (HRA) Vs. Rent Free Accommodations (RFA) House Rent Allowance (H.R.A.) results in tax savings because accounting under Income tax act is direct exemption based. However, accounting of Rent Free accommodation is valuation based taxation and added to total income of employee presumptive basis.

What is the tax implication of rent free accommodation for employees?

The tax implication in both the circumstances is different. When the employer provides the accommodation, then it will be treated as perquisite (Rent free accommodation) and will be taxed in the hands of the employee at certain rates.If rent is paid by the employee directly, then he can avail benefit under House rent Allowance (HRA).