Taxable lodging perks to impact 'gurukul' system: IIMA Director

Fearing the most debated issue of 'taxable lodging perks' reaching Indian Institute of Management, Ahmedabad, the premier management institute has made a submission to the Ministry of Finance, stating it will impact educational outcomes.

The teachers at the IITs and other institutes across the country have been served with notices by the income tax department asking them to pay a levy for accommodation on campus.

Both government and non-government employees have to pay tax on prerequisite value when the employer provides accommodation. For non-government employees, the pre-requisite value is 15 per cent of the salary + 30 per cent tax.

Confirming the same, professor Errol D'Souza, Director, IIMA, said, "Our issue is that everyone here has equal housing. Two people living in similar houses and paying different rent is not equal to the law. This will force faculty to stay outside the campus as the cost of staying on campus will be very high. This will impact educational outcomes as we have classes even at 8.00 pm and also hold surprise quizzes."

"IIMA follows a gurukul system where everyone lives on the campus. If that goes away, we might not be producing industry ready students. One of the best advantages of our students is that they can be called in at any time. We believe it is bad in law as it does not treat equals equally. We have represented to the Ministry of Finance expressing our concerns over this and I must say the secretary has been very supportive," he added.

Citing an example of an IIT professor based in Delhi, he said, "Fortunately or unfortunately, a professor in Delhi, doing consultancy, was asked to pay more than his salary. He eventually made a representation and now the authorities are looking into the situation more seriously.

A faculty member, requesting anonymity, said, "We are a public institution and we were given housing as a perk. We never got an HRA and were paying the license fee for the housing. The new formula, if implemented, will compel us to move out of campus, which will impact education. Many a time, the faculty and students discuss projects at night after classes, which is only possible because we all live together on the campus."

Another faculty member said, "This is a stupid policy. While it will not impact faculty in cities like Mumbai where the cost of living outside the campus would be high, in small towns or a city like Ahmedabad, cost of living on campus would increase so much that a faculty would prefer to live outside the campus. This policy will discourage residential campuses in small cities."

Unfortunately, IISC and IIM-Bangalore have agreed to pay. IIM-Calcutta went for advanced ruling and is not supposed to pay.