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Rent-Free / Concessional Accommodation perquisite

The taxable value of employer-provided accommodation under the rules in force from FY 2023-24 (section 17(2) / Rule 3).

Switch calculator — current: Rent-free accommodation

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Your details

Employer type
Accommodation provided
Salaryall taxable components; summed to total salary
Same accommodation provided for more than one year?

Your answer

₹ —

Still needed: total salary, the accommodation type.

  • The figure, and how it compares where there is a choice
  • Every step of the working, line by line
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For guidance only — not tax advice. Every figure is drawn from BharatX’s verified rule book, with the sections and rules shown alongside it.

Rent-free accommodation: how it works and FAQs

FY 2025-26 (Income-tax Act 1961) and FY 2026-27 (Income-tax Act 2025) · Updated

How it works

Accommodation your employer gives you is a taxable perquisite.

Accommodation your employer gives you is a taxable perquisite. Under the rules in force from FY 2023-24, for a private employer who owns the place the value is 5%, 7.5% or 10% of your salary depending on the city population; if the employer rents it, the value is the lower of 10% of salary and the actual rent. Furniture is added and any amount you repay is subtracted.

  1. Owned by employer, city ≤ 15 lakh → 5% of salary; 15–40 lakh → 7.5%; over 40 lakh → 10%.
  2. Not owned by employer (rented) → the lower of 10% of salary and the actual rent paid.
  3. Add the value of furniture & amenities, subtract any amount recovered from you.
  4. If the same accommodation ran more than one year, the value is capped using the cost-inflation index. The result is never negative.

Worked example

Taxable perquisite = ₹75,000.

Private employer owns the house, city population 15–40 lakh, total salary ₹10,00,000, no furniture, nothing recovered.

  1. Base = 7.5% × 10,00,000 = ₹75,000.

Taxable perquisite = ₹75,000.

Frequently asked questions

How is rent-free accommodation valued now?

From FY 2023-24 it is 5% / 7.5% / 10% of salary by city population for employer-owned homes, or the lower of 10% of salary and actual rent for rented ones, plus furniture, less any recovery.

What changed from FY 2023-24?

The percentages were reduced and the population slabs were revised (to ≤ 15 lakh, 15–40 lakh and over 40 lakh), so the perquisite is generally lower than under the old rules.

Every figure the calculator shows lists the sections it relies on under “Legal basis”. For guidance only — not tax advice.