Dear Friends,
What are the standard T-Codes / Process in SAP HR for “RFA” (Rent Free Accommodation activities) in payroll.
(I believe that the process will cover the income tax rules 1961.)
Below are details with example for RFA.
Rent free accommodation and Taxation
When employer provides employeefacility of rent free accommodation. Value of it is taxable as perquisites in salary head of income tax.
For calculating perquisites value taxpayer has to follow two steps.
Step 1: find out unfurnished accommodation's value
Step 2: find out furniture value if it is furnished house.
Value of perquisite: value of unfurnished accommodation plus value of furniture.
Perquisites value for government employees is license fee determined by government for accommodation.
Other than government employees:
Note: salary means basic + DA (if forming part of salary for retirements benefits) + taxableallowances + bonus + commission but does not includes
DA (if not forming part of salary
Exempt allowances
Retirement benefits
Employer’s PF contribution.
When employee is transferred at some other place and getting new accommodation at the other place retaining old accommodation, value of perquisites shall be:
- For a period not exceeding 90 days, find out the value of both accommodations and consider the one which has lower value.
- Where the period exceeding 90 days, the value of perquisites will be charged for the both accommodations
EXAMPLE:
An employee getting following salary and resides in Delhi and getting rent free accommodation and house is
owned by employer.
Perquisites value will be 15% of salary (more than 25 lacks population)
Salary for perquisites purpose: basic + bonus + city compensatory allowance = 680000* 15% =102000
Suppose the employee stays in rent free accommodation for which employer pays 120000. In this situation,
Perquisites will be 120000 or 102000 whichever is lower means 102000. If
accommodation is furnished and employer is paying 20000 p.a. for furniture so
we have to add that 20000 to calculate perquisites value.
I appriciated if some one provide informations for how to process these RFA activities in SAP
Thanks,
Prabu