Rent-free accommodation is classified as a 'perquisite' (non-cash benefit) under Section 17(2), not as an 'allowance' (cash payment). The distinction matters for computation: perquisites are valued using prescribed rules (based on city population and salary), while allowances are directly added to taxable income with any applicable exemptions. Section 10(13A) deals with HRA exemption (an allowance), and Section 16(2) deals with standard deduction — both are different concepts entirely.

1. 1 Pick up IT Act.
2. 2 Go to Section 17 (definitions for salary income).
3. 3 Read sub-section (2) — 'perquisite' includes: rent-free accommodation ✓, concession in rent, employer-paid gas/electricity/water/education, etc.
4. 4 Confirm: rent-free accommodation = perquisite, NOT allowance.

The text reads: Section 17(2) IT Act: 'Perquisite' includes (i) the value of rent-free accommodation provided by the employer, (ii) any sum paid by employer for gas, electricity, water, etc.