Adding Perquisites on Accommodation, deducting income tax without paying any rent by employer

POSTED BY banikat ON February 14, 2014 3:34 pm COMMENTS (3)

Dear  Sir/ Madam,

A PSU employer has added perquisites on accommodation to the income of an employee, then deducted income tax and thereafter submitted TDS to Income Tax Dept and provided Form 16 with paying any rent to the employee.  The same matter is pending under disciplinary proceedings.

Employer on one side has stopped paying the HRA, rent towards accommodation to the employee but on the other side,  kept showing rent to his income account and kept deducting income tax and TDS and even issued Form 16 to the employee without paying any rent to the employee in the Financial Year 2012-13 and 2013-2014.  As per my understanding, employer has committed falsification of account by showing false perquisite income to the employee account and thereby showing false expenses and securing income tax reduction without paying any rent to employee or to the houseowner. On inquiring by the employee, the employer’s establishment dept. directed to take up the matter with Income Tax Dept. for tax adjustment.

Please let me know  the following:

(1) whether such  an false accounting by an employer is questionable & offence or not. If so, what is the procedure for the same.

(2) Can an employer do such false accounting without paying the rent in actual.

(3) Can an employer add such perquisite on accommodation, deduct income tax & TDS and issue Form 16 without paying any rent to the employee  under any provision of law.

(4) Can such false accounting be audited and annual report be released to be correct without the payment of rent in actual. Can the annual report be questionable. Can the auditors be questioned.

(5) Please advise how and where can I communicate such malpractices by the govt organization officials on such false accounting who are harassing the employees.

3 replies on this article “Adding Perquisites on Accommodation, deducting income tax without paying any rent by employer”

  1. ashalanshu says:

    Dear Banikat, as you are not living in employer provided accommodation, how can the perquisite value be imposed on you?

    thanks

    Ashal

  2. banikat says:

    No since Jan 2012, staying at own expenses in a self acquired flat

  3. ashalanshu says:

    Dear Banikant, are you living in employer provided accommodation?

    Thanks

    Ashal

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