Sec 10(2)(c) Place of Residence provided by the Employer

This is an undoubtedly a taxable benefit. The only doubt here is how to compute the quantum of taxable benefit.

Benefit is applicable to employees. Not applicable to directors who are employees too.

What is the Rule?
The taxable value of the accommodation is the lower of:-

  • 10% of the gains or profits from employment LESS any rent paid by the employee; OR;
  • the annual value of the premises.

Illustration

Annual value – $38,000

Rent paid by employee – $700 x 12 months = $8,400

Remuneration from employment – $150,000

Which of the following presentation is correct?

Option A

Lower of:-

  • (10% x $150,000) = $15,000 or
  • $38,000

The lower amount being $15,000 ==> taxable benefit would be $15,000 less $8,400 = $6,600.

Option B

Lower of:-

  • (10% x $150,000) less $8,400 = $6,600 OR;
  • $38,000

Thus the taxable benefit would be $6,600.

Which do you think is the correct presentation though both give you the same answer?

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