Respected Sir,

I, R Baskaran, Sr. Manager Finance, Mungoli Sub Area, Wani Area, humbly submit an innovative
proposal which will improve the working capital of WCL and also the profitability of CIL and its
subsidiaries.

It is inevitable to pay Tax on House Rent Perks on Gross Salary received less the exempted
income u/s 10(14)(i) &10(14)(ii),as per Rule 3 of Perks tax u/s 17(ii).

(a) Now the Gross salary is already taxed in the hands of employees which is considered as
expenditure for the purpose of Corporate Taxation.
(b) The House Rent Perks is a deemed income of the employee u/s 17(ii) as per tax laws. The tax
So arrived varies from Rs. 23,175/- to Rs.46,350/- for an income of Rs.10 lakhs to Rs.20 lakhs
respectively.
(c) Presently we are paying House rent as
Rs. 75/= p.m.for B Type. Rs.900/= per year
Rs.115/=p.m. for C Type Rs.1380/=per year
Rs.180/=p.m. for D Type Rs.2160/=per year
(d) The rental income at present is very nominal as compared to the facility provided to the
executive employees.
(e) If we tap, the cash outflow of the executive employees to the tax exchequer, by increasing
the monthly House rent including the Electricity deduction of 1% to the tune of 5% of Basic
pay then the company can save (2000 x Rs.7000/-)=Rs.1.4 Crores as shown in the table, even
after the payment of House Perks Tax of Executives by the Company.
(f) Each executive having basic of >Rs.60000/- will also have a saving of Rs.6500/- per year
without paying House Rent Perks Tax.

Presently as per the extant HRA rules, clause No.9.1. the Company has fixed licence fees
based on plinth area shall be calculated on the basis of rates of license fee as circulated by
Ministry of Urban Development , Directorate of Estates and Government in respect of
residential accommodation for Central Govenment from time to time.

To whom licence fee is applicable is to be seen. If licence fee is applicable to us then

valuation of House perks shall be = NIL as per sl.No.1. of Table 1 under clause 3 of valuation
of residential accommodation.
As we are PSU employees we are liable for house perks of 7.5% of Gross Salary in which case
licence fee determined for Central Govt./State Govt.Employees is not applicable for us.
Then why we should pay huge tax on House Perks by recovering a trivial amount of licence
fee towards our accommodation.
Now it may be seen what is GPRA, who is eligible to apply, when to apply, and how.

What is General Pool residential accommodation?

Government residential accommodations under the administrative control of Directorate

of Estates in Delhi and at 31 stations outside Delhi constitute the General Pool residential
accommodation (GPRA). Allotment of GPRA is governed as per provisions of the
Allotment of Government Residences (General Pool in Delhi) Rules, 1963 and executive
instructions issued there under.

Who is eligible to apply?

All Central Government employees and the employees working under the Government of
NCT of Delhi, who are working in the offices, which have been specifically declared
eligible for General Pool, are entitled for allotment of accommodation from General Pool.

When to apply and how?

Applications for allotment of entitled type of accommodation can be made at any time
after regular appointment / joining on transfer at the place of posting in the organisations,
declared eligible for GPRA. The applications received up to the last day of the month are
included in the Waiting List of the subsequent month.

All applications are required to be made on the prescribed DE-2 forms, duly forwarded by
their administrative offices. Such application forms can be purchased from the
Information and Facilitation Centre (IFC), Directorate of Estates, Nirman Bhawan, New
Delhi, on payment of Rs. 5/- each.

Now looking in to the need of the hour and also by virtue of holding the Position of
“Maharatna”, it is suggested to review the Clause No.9.1 of HRA rules of CIL as 5% of Basic
Pay (including 1% of Electricity). Even then the WCL will gain revenue to the tune of Rs.1.4
Crores and CIL will gain to the tune of Rs.

Thank U