Tax Calculation for Housing Perquisites by Average Tax Rate 
As a benefit, non-monetary perquisites such as housing perquisites are liable to tax. This function enables you to calculate the tax on housing perquisites per month by using the average tax rate. In addition, you can include this as part of the tax to be paid by the employer.
Features
The tax on housing perquisites uses the average tax rate as follows:
Housing Tax = Housing Perquisites X Average Tax Rate
The average tax rate determines how much the corresponding income is taxed. The income you choose as the tax base determines the average tax rate. In the standard function, the taxable income is the sum of the following values:
Incomes under head salary
Section 80 deductions
To determine the employees for whom the employer pays the tax on perquisites, make Customizing settings in the Employee’s Tax on Housing Perquisites (40TOP) feature.
Activities
You can change the taxable income by modifying the wage type being processed.
You can also use this tax calculation for other non-monetary perquisites. To do so, make adjustment in the personnel calculation rule INET. For more information, see system documentation for INET.