Home List Manuals Income TaxIncome Tax - Ready ReckonerSalary Income This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
Perquisites - Motor Car - (Rent Free / Concessional) - Rule 3(2) - Income Tax - Ready Reckoner - Income TaxExtract Rule 3(2) : VALUATION OF PERQUISITE IN RESPECT OF MOTOR CAR Private Purpose Official Purpose Private and official purpose Car owned by the employee and expenses met by him Not a perquisite Not a perquisite Not a perquisite Car owned by the employee and expenses are reimbursed by the employer Actual expenses of employer Less: Amount recovered from the employee balance amount will be perquisites in employee's hand Not a perquisite (See Note-1) Calculate actual expenditure on by employer Less: If car engine capacity 1600cc, perquisite is 1,800 p.m. + 900 p.m. if driver is provided If car engine capacity 1600cc, perquisite is 2,400 p.m. + 900 p.m. if driver is provided OR Higher sum as recorded by logbook by employer Amount recovered from the employee (if any) Car is owned/ hired by the employer and expenses met by the employer Actual Expenses by employer Add: Depreciation (10% of the actual cost of car) / hire charges (if car is hired) Less: Amount recovered from the employee Not a perquisite (See Note-1) If car engine capacity 1600cc, perquisite is 1,800 p.m. + 900 p.m. if driver is provided If car engine capacity 1600cc, perquisite is 2,400 p.m. + 900 p.m. if driver is provided Note : Nothing is deductible in respect of any amount recovered from employee. Car is owned/ hired by the employer and expenses met by the employee Sum total of Actual Expenditure incurred by employer Depreciation (10 % of the actual cost of the car) / hire charges (if hired) Driver s salary Less: Amount recovered from the employee Not a perquisite (See Note-1) If car engine capacity 1600cc, perquisite is 600 p.m. + 900 p.m. if driver is provided If car engine capacity 1600cc, perquisite is 900 p.m. + 900 p.m. if driver is provided Note : Nothing is deductible in respect of any amount recovered from employee. Note-1: Conditions to be satisfied if the Car is used for official purpose: The employer has maintained complete details of journey undertaken for official purpose which may include date of journey, destination, mileage, and the amount of expenditure incurred thereon. The employer gives a certificate to the effect that the expenditure was incurred wholly and exclusively for the performance of official duties. Content of log book - Complete details of the journey such as date of journey destination, mileage and amount of the expenditure incurred. The principle of Arm s length price will apply while cars taken from related parties. Note-2: Where more than one car is being provided for use for employee or member of his family then valuation will be as under: Only one car will be valued as partly used for official purpose and partly for private purpose Other cars will be valued as fully used for private purpose. Note-3: Car facility between office to residence and back shall not be regarded as a benefit and is not chargeable to tax at all. Note-4: Vehicle other than Car owned by employee and running and maintenance met / reimbursed by employer If used for official purpose fully exempt (See Note-1) If used for private purpose then expense met by employer is fully taxable as perquisites. If Partly used for office: Actual Expenditure incurred by employer Less: 900 p.m. or higher sum for official purposes Less: Any amount recovered from employee NOTE-5: Car facility between office and residence The use of motor car by an employee for the purpose of going from residence to the office or from office back to residence, is not chargeable to tax at all.
|